First of all, hello everybody. Good morning. Good morning to all of you here in Johannesburg, but as well, when you're joining us on the phone or you'll be in front of your screen. We are delighted to have you here for our result presentation 2021. Let me first say that I joined this company actually last year in July as a Chief Operating Officer. I have to say, I'm honored to be in front of you today as the Chief Executive Officer. Together, actually, with my dear colleague Eliza, who has been with the company already since 2014, but now got promoted to be the CFO of the company.
Well, this gives me the opportunity to send our regards and a big thank you to my dear colleagues, Alex and Mirela, who have been running this company over the last couple of years, which now is actually the leading retail real estate platform in Central and Eastern Europe. Later on, we will have a Q&A session. If you're on the phone, just look up our website where you'll find some dial-ins, or if you're in front of your screen, on the upper right side, you will find a button to join us online. Well, this leads us actually right away into the presentation. Hoping to find the right button here. It goes slow. Very slow. I'm not expecting the technical problems, ladies and gentlemen. Where can I flip the page please? This doesn't work. All right, we'll do it right here.
Should also work. We're flexible. Got it. Sorry. Sorry everybody. We did a rehearsal, but as you see, there's always the devil in the technical details here. All right, here we go. Does this work now? It's gonna work. Perfect. Now we're here. What has been driving actually our business in 2021? I think definitely it was more the second half of the year than the first half of the year. Because in the second half of the year, we saw that actually governments were lifting restrictions. Not to the total end of it, but obviously the total environment that we were operating in throughout our countries has been improving tremendously starting from May, actually, of last year. What we saw actually, mainly, the turnovers were bouncing back immediately to the levels of 2019 or even above that.
That has also stimulated retailers to come back to expansion. Not only building new stores together with us in our new developments, asking for space, but as well enlarging their stores and also investing into all stores and refurbishing them. Now, it has also been proven right, our strategy on the concessions to our tenants throughout this crisis, because the strategy was to give it only for a month to be able to react immediately. That has helped to bring down actually the concessions quite tremendously throughout the second half of the year, which of course then had a big impulse on our NOI growth. Now, the merger of online and offline is ongoing.
Here, I think we improved quite a lot with our strategy on omni-channel, and you will see later on what kind of initiatives we took in order to grow together with our tenants in the offline sector, but as well in the offline sector. Now, what we've restarted, definitely, is our development pipeline. We'll come to this later a bit more in detail, but we started actually on our mixed use developments and purely retail developments already beginning of this year. As said, I think speaks for itself, the numbers, the valuations are very stable, and our balance sheet remains rock solid. Now, what does this mean in numbers? Maybe let me start with what we have been talking about, our NOI growth. We've been growing from EUR 323 million to EUR 347 million.
Nominal, you see that in the, in the green box there, 7.4% growth. Well, doesn't sound so big. It's normal, and it's affected actually, obviously, by the fact that we still have in here the sales that we had in Bucharest on the offices, but as well on the smaller retail units that we sold in Serbia. I think the more important number, though, is the like-for-like growth. How did actually our retail performance has been over the last 12 months of 2021. I think that is a double-digit growth of up to 12%, which I believe is also in comparison with peers, is quite a good result. That is manifested as well in the turnover per square meter.
You see down there it was EUR 1,600 per sq m, and now actually productivity went up to EUR 2,000 per sq m, so it's a plus of 26.8%. I think this is quite a good growth number. You can see with this, obviously, that the profitability of our retailers just went steeply up. Again, which has helped to bring down our discounts to tenants and to improve the NOI. Now, when we look at the numbers regarding more on the balance sheet and our liquidity, this is very stable and very strong. Total investments still at EUR 4.8 billion. There have been no further disposals since 2019. Then you see that our loan to value is actually down to 30.9%. A little improvement.
That has mainly to do with the fact that due to the good operations, we have been able to increase actually the valuation here by EUR 35 million, approximately. Elisa will give you the super correct numbers a little bit later on. So I think this is also very stable and going into the right direction. On top of this, we were able to pay down some loans in Poland and Slovakia. That's why actually unencumbered assets currently at 91%, up from 83%. Now, when we look at the average debt maturity, it tells you three point seven years, but this is based, obviously, on the 31st of December last year.
Which is not the number that we should look at the very moment, because you know that we did a bond issuing where we replaced the bond for 2023, a green bond of EUR 500 million, which we did in January, for quite favorable conditions, I have to say. The maturity is, at the very moment, at 5.1 years. I think this is also a good result that the team could achieve already in the beginning of the year. That is actually the moment where I need to hand over and I'd like to hand over to Marek, even though I would love to present it myself, the operational results. Marek, you go for it. Thank you. See you later.
Thank you Rudi. Good morning, everyone. It's actually very happy to be able to come physically to South Africa to do the presentation. It's been two years, seems like yesterday. A lot has changed over the last two years, but as Rudi said, the business is sound and I'm happy to tell you where we last year and where we are heading, what is the strategic approach, and how do we think we need to position our company going forward. To start with, you can see the operations of our shopping centers in the year 2021 compared to 2019. What you can see is that actually whenever we are almost fully open, so to say, starting May, the turnovers of our tenants were back to the levels of 2019 or actually in many cases a bit higher.
You can see the first four months were a bit more difficult because we had more lockdowns, et cetera, and hence the malls were not fully operational. Starting May, we observed increased, increasing month-on-month turnovers and footfalls coming back to 2019 levels. It slowed down a bit at the end of the year, again, due to the fifth wave and a lot of hospitalizations, et cetera, and some lockdowns here and there. Generally, the year ended up at a very strong note. We are not there yet compared to 2019 when it comes to yearly turnovers but again, it's a function of the base.
There was a lot of lockdowns last year, we believe that this year will not bring any major lockdowns, and therefore it should be a proper growth year compared to 2019. Discussing in more detail how the behavior of our clients changed. What you can see actually here is how the footfalls and turnovers were returning to their 2019 levels. You can see that, despite footfall lagging a bit behind the turnover bounce back, it's clear from what we observed that those customers of ours who were not actually the shoppers, we call them window shoppers, they are not coming there because there's still not no reason for them. Hence, the basket, the average transaction in our shopping center increased tremendously, over 15% 2020 compared to 2021.
We can see this trend continuously, which proves the point that shopping centers play a vital role in the distribution systems for all the retailers, and we don't see that trend changing. Maybe a bit complicated slide, but what we want to reiterate here is that looking at the turnovers of our tenants in 2021 compared to 2019, we are at least as we were in 2019 or better in many cases. The only outlier, or lagging behind, is entertainment. There are good reasons for that. When we get our fashion tenants reopened, they sell properly. Where cinemas were open in Europe, in Central and Eastern Europe in particular, there were a lot of restrictions still there.
At the beginning, the cinemas could sell only, let's say, thirty percent of their capacity. They were kind of open, but they couldn't fully trade. When they opened fully and they could sell hundred percent of the available seats, we could see that the turnovers and customers were really rushing back to the cinemas. We had a lot of proper Hollywood productions, which has driven cinema market tremendously. We are working on various of developments, and there are cinemas who are very interested to expand further and increase their footprint in CE, believing that the cinema market is not mature yet, which sets the very positive tone for the overall market. We stay positive. There were a lot of questions during the pandemic, what about entertainment?
We haven't seen any financial difficulty of any of the shopping, cinemas in the region we operate. More than that, we continue the fruitful cooperation with our main entertainment partners. When it comes to leasing activity, with turnovers bouncing back to 2019 levels, we have seen an increase in leasing activity. We have signed over 1,100 agreements, of which 40% are new leases. I think it's very important to note, we just don't sit there and passively prolong the agreements and that's all we do. No, 40% of what we signed are new tenants. We are always keen, and that's actually one of our main KPIs, to exchange the tenant mix.
Just look at the underperformance, change them to new tenants, move the tenants across our portfolio, bring new tenants to our portfolio. One of our main goal is to always keep the tenant mix fresh and the teams are very focused on that. Hence, those number are quite remarkable. If we add on top of that decreased retail vacancy for 2021, I can proudly say that was a good year for the leasing and asset management teams. Going further, looking at our tenant mix, it has always been and it continues to be very strong mix of international tenants. You can see top ten of our tenants who represent over 24% of NOI, none of them being in any sort of financial difficulty.
Actually when you look at the list, we are in discussions with all of them about expanding. We are not talking about closing stores. They want to increase their footprint in the region we operate, and we are their partners for them. Should you extend the list to 50, none of them is in any sort of difficulty. We passed that situation of cash flow issues to be managed. Tenants are in expansion mode, and we are there well-positioned to help them and run profitable business. When you look about OCRs, which is one of the key metrics, you will remember we have always been on the safe side. Sub 13%, way below 15%, which is considered market equilibrium level, so to say.
Of course, 2020 shown an increase of that metric, but in 2021 we are gradually decreasing OCRs, and we should see the trend continuing towards 2022. When it comes to retail environment, pandemic has not changed. I'm mentioning that because we got those questions. The pandemic has not really changed the retail environment. We are still signing Euro agreement. They are still five years or longer. There are triple net, properly secured w e call them bankable, investable. This hasn't changed, t here were questions around it. We can close the discussion. This has not changed. Tenants want to expand, and the only way to expand is to sign agreements as the market expects.
We are happy we did manage to keep that those important parts of our lease agreements unchanged. Of course, as each year, we want to showcase a bit how busy we are with our tenants. We spent the last couple of months traveling to our main anchors to discuss with them the challenges they face, where they want to expand, et cetera, et cetera. It's very interesting to see how their plans changed from what it was a year and a half ago to today. They really want to expand. All the brands you can see, we are very busy expanding the footprint and signing agreements with Kaufland, expanding CCC, and actually their new brand. The same with Primark.
They will open this year in Bonarka, and there are more agreements we negotiate with Marius and the rest of portfolio. Carrefour, LPP, Inditex, et cetera. On that list, you can see a lot of brands. Very importantly, a lot of them are new, either to the countries or the region we operate. If you look at Sportano, if you look at JD Sports, et cetera. Our cross-border leasing team is doing a tremendous job to make sure that none of the leads we would have in any of the countries by any international retailer would go unnoticed in the portfolio. This is not happening, and hence we are so successful in actually partnering our tenants in expanding from Warsaw to Bucharest and whenever they want to be in Eastern Europe, where we operate, and this is the way we want to continue our business.
We call ourselves one-stop shop for retailers because in one meeting we can offer them over 50 locations, unique locations. See, I don't know another company who could do that. I think we are very well positioned for this returning retailer market, and we stay positive looking ahead. Of course, physical retail is where it is. We know the fundamentals are there, and we don't see major risk over there, but we are very focused on improving our digital strategy and our omni-channel strategy. We have launched very successfully loyalty app last year, and it will be extended to all of the portfolio, unified products. That would actually be something unique, again, in European scale. We have initiated our marketplace in Bulgaria. It was a learning curve for us.
We learned a lot, and you, well, stay tuned. You will see a lot of us showcasing new digital initiatives. We just won't stop. Once we started, we will get there. We know we need to be in omni-channel world. We are in a retail world where physical retail is one of the channels, distribution channels for our retailers, and we are well aware omni-channel is the solution, part of which, of course, is physical presence, but we can support our tenants with marketplace in themselves as well. With that comes, of course, unified customer database. We are very focused. I would actually call quite almost a digital revolution within our organization.
We are unifying CRM, ERP, and other systems to make the data that we collect every day available to us almost online because live, because this is how we want to make decisions, based on our live consolidated data. Again, that's a big change, and we are looking forward. This year should be a very big progress in that field, and we'll be happy to report by the end of the year where we are. It really is a major shift for us in very, very good direction. With that being said, I'm happy to hand over to Eliza. Thank you very much.
Thank you Marek. Not sure which one of the logistics is going to work. Let's try like that. Is it working? I hope so. Okay. Good morning everybody. I'm Eliza Predoiu. I'm the newly appointed CFO and the newest member of the board. For those of you that know me, I've been with the management team for the last eight results presentations, and the difference now is that I'm sitting in front of you with the content behind to be delivered. I must admit that there are some emotions attached to it, and I get to know what the stage fright is. Enough with the introduction, and let me kick off my presentation. In the final section, I will tell you about the distributable earnings, about liquidity and finance, and about valuations.
On the distributable earnings, the good news is that this year, as Rüdiger and Marek already mentioned, we managed to extract more values from our properties, which translated into a 16.3% growth relative to the distributable earnings. This is a great achievement in the context of a pandemic year, which was marked in the first half of the year by significant trading restrictions. The number shows the very well-managed performance of the properties, which is a great achievement in absolute terms and also relative to our peers. There have been also some other decisions impacting the distribution, and one of them, as Rüdiger already mentioned, was the disposal of the Romanian and Serbian office, the Romanian portfolio and the Serbian properties.
First, this decision impact this distribution, but in the long run, it's a very good decision because the portfolio property is better off. Second, by this disposal, we benefited from a significant level of liquidity in the pandemic context, and now we are very well-positioned for capitalizing on growth. Further details on our strategic endeavors to generate growth are going to be elaborated by Rüdiger later on. Third, we navigated in a pandemic context with an LTV of 30%-32%, which was not a risk by any of our stakeholders looking at us. Another decision that was made to enhance the liquidity was to issue a green bond last year during the pandemic in July 2020, which was greatly priced in the market context, but at a higher coupon and cost relative to the pre-COVID times.
This has also an impact on distribution. All the other elements are immaterial, and if I were to stop here today, I would have been communicating to you a 5.5% growth in distribution. There is this other element with a significant value that most of you are aware in this room and that Rüdiger will further on elaborate in the way forward section, which is a penalty in relation to an arbitrage loss in connection to a discontinued acquisition back in 2019. We received the decision. We factored in the entire expense in this financial statement and in this distribution. The positive side of it is that we are going to start with a clean 2022 with no legacy whatsoever. Now that I'm done with the distributable earnings, I will move to funding and liquidity. I hope.
Yes, I do. Okay. First, I would like to highlight where we stand in relation to the three strategic pillars of finance strategy. We are at a very prudent LTV of 30.9%, which is significantly below our threshold. We have a very good liquidity with a buffer of EUR 620 million revolving facility, and we maintained our investment-grade credit rating, and we even positioned better by getting a positive outlook in a pandemic context by Fitch. The rating agencies, I would like to highlight here, they have started to look to another gearing ratio than LTV in the pandemic context to net debt over EBITDA, which is an indicator much more in control of the management.
I'm happy to report that throughout the years, we had a headroom of at least 100 basis points relative to the threshold imposed by the rating agencies. Other key highlights here are the fact that the cost of debt throughout 2022 was 2.4%, that all the interest rate risk is 100% hedged, and the average remaining debt term as of31st December was below four years, but it was immediately increased to 5.1 years due to the strategic bond issue that we had in January 2022. In the next slide, there are also a few key messages which are all important. The fact that we took intended action to maintain the previously existing facilities and even increase them to EUR 620 million, ensuring enough buffer liquidity.
That we managed to conclude our first bilateral agreement with the International Finance Corporation. This boosts our reputation and credibility in the financial markets as NEPI Rockcastle is a safe place to invest by any financial institution. Third, we secured 2022 and 2023 without significant debt obligation, and we did that by repaying the EUR 242 million in Slovakia and Poland. We strategically issue our second green bond of EUR 500 million for an eight-year term. We also took intended action to ensure that our portfolio is unpledged, and currently we have 90% of the portfolio not being encumbered. The chart also show the debt maturity profile as of February, which doesn't have any kind of debt obligation in the upcoming two years.
The next slide is also connected to liquidity, and I will go quickly through it because it actually enhance the point that I made previously. We are a very well-positioned company with a good solvency ratio, good coverage ratio, and with a significant proportion of our portfolio being unpledged. The last slide connected also to liquidity is that our distributable earnings is fully supported by the cash flow from operating activities. We discuss only by the recurring distributable earnings, the gap between the cash flow from operating activities and the recurring distributable earnings would come exclusively from the way in which we are accounting for expenses relative to the settlement on cash.
The element of the expense with litigation claim, which is unsettled as at 31st December 2021, and as I mentioned, Rüdiger will elaborate on it, makes the gap a bit larger between the distributable earnings and the cash flow from operating activities. The company decided to distribute 100% of the distributable earnings to be settled in cash in March, which is in line with our distributable earnings policy of 90% or more, and which will add a few percentage points immediately in the LTV, but we are going to be still prudent and below the threshold. The key message after covering the liquidity and funding is that NEPI Rockcastle is in a safe liquidity position, is in good hands with us, and has a very safe balance sheet. Moving forward on the valuation, the main point, there are three messages that I want to cover here.
One of them is that the valuation went up by EUR 34.7 million. This uplift is solely due to the performance of our properties because the valuation yield remained constant relative to December 2020. The third message that I want to convey here is that the strong valuation will enhance our LTV, and this will better position us for generating growth via attracting new funding. Now that I'm done with the finance section, I will cover two other topics, ESG and relocation of the parent company. ESG stands for the environmental, social and governance, and this became a strategic priority for us. It's covered in only one slide, but I will report year-on-year to you on this ESG.
Here on this slide, we presented a snapshot of the key initiatives in 2021 relating to the ESG and the recognition of our efforts. I will start with the right side of the page with the recognition of the efforts in the ESG direction in the way that we received the bronze award from EPRA for our transparency and sustainability report. We are rated as a low ESG risk by Sustainalytics and put as an A ESG rating leader by MSCI. What we are doing is that we have our portfolio. Three-quarters of our portfolio is green certified by BREEAM, and we're busy to have the entire portfolio green certified by the end of this year.
The key initiatives rolled over in 2021 is the implementation of the composting equipment in all properties in Romania and Bulgaria, the installation of LED lighting across portfolio, with 75% of the gross floor area being covered by LED lighting, and the enhancement of the green urban mobility by the extension of electric car charging network, and in this direction we partner with Tesla. We also continued our green finance strategy started in 2020, and currently 60% of our funding is green labeled. The key message of this slide is that we are at the early stages of a long-term journey, which is the ESG, and this is a strategic priority for us and will require some wise investments in the future in this direction.
The last topic that I will cover is another strategic decision of NEPI Rockcastle to relocate the parent company from the Isle of Man to the Netherlands. The Netherlands has been studied from various angles, and the conclusion is that this will enhance the long-term sustainability of the business by positioning the parent company in a politically and economically stable EU jurisdiction, much closer to our properties. This will enhance the visibility of the group in the European market and will attract a broad range of investors. It's also a natural fit for the group because the group is already listed on the Amsterdam Stock Exchange. The company, by this relocation, will continue its operation, and this does not entail any kind of disruption in share trading or dissolution or winding up of any company in the group.
The implementation is going to be done in two processes: an initial migration to Luxembourg, because the Dutch law does not allow a transfer of a company from a non-EU country to an EU country, and then it's going to be a subsequent migration to the Netherlands. We will reach the Netherlands via a stepping stone to Luxembourg in order to have the continuation of the business. The key milestones in this respect are going to be the shareholders' approval, which is preliminary set for April and May, this orange dotted dotted dots, and a detailed SENS announcement is scheduled for the upcoming weeks in March 2022.
Another key message that I want to say here is that this was a well-thought decision, that in the long term this will enhance the value and the sustainability of the business and of the operations, that there are challenges to this relocation and all of them have been taken into account and answers have been found to them. I will let a bit this slide here because I'm sure that there are going to be some questions later on, and I will also turn the floor to Rüdiger. Thank you.
Take the mic. Let's start this one please. Thank you.
I take this one. We're flexible like always. I can imagine you all have quite some questions around the case of Serenada. It is actually a litigation that was ongoing over the last three years, and we have informed you by the end of January that the tribunal of the arbitration has been awarding actually a claimant here for EUR 30 million damage against us, plus interest, which all leads to this EUR 37.5 million. This is a one-off, and as Eliza has been showcasing is we have been treating this financially immediately as a provision within our financial statements. What does it actually mean? Here, this ruling actually, it consists actually of three members in the arbitration, and one of them was definitely dissenting actually the opinion of the other two.
There is definitely the willingness of the board and the management to challenge this decision. We're not just going ahead and going to pay this. We will suspend the payments, number one, and definitely we will, if I may say it this way, fight this opinion by actually appealing against it in front of the Polish court. This means actually that we take it forward most likely over the next two years. There will most likely not be a decision within the next two years as this appeal obviously will take its time until we get a final decision. That's number one. Number two, what other options are there? Obviously, there's always the option for a settlement, but obviously only if this would be favorable for our shareholders.
These are the two options that we're currently looking at, and so it will not have a direct impact at the very moment as we will follow up on this and will challenge this decision of the arbitration. We do believe that we have good grounds, not to just postpone it, but really also to, let's say, get a benefit out of this appeal for you as our investors. That's number one, maybe talking about, especially the Serenada case, and if you have later on questions to it, as far as we can, I'm happy to answer those questions. Looking to the way forward, I mean, you all have been, most likely this morning reading and seeing the breaking news which are concerned about Europe at the very moment.
The Russians have finally invaded Ukraine, and they have not just invaded the eastern part of it, they are going for the whole country, or at least bombings in Kyiv, at the capital. That is a neighboring country, and is a geopolitical issue obviously. But for the very moment, we are not as much concerned since we have no operations in Ukraine and none of our assets is even close to the Ukrainian border. We don't see an immediate impact, I would say, at the very moment for our business. But how this will turn out over the next couple of weeks and months is economically for Europe, I think, also for me and for everybody I think in the room, unforeseeable.
We will have to deal with it, but I think you saw, together with Eliza, we are prepared. Actually this is of course something that we need to take into consideration, but I wouldn't like to look forward in a negative sense. I would really like to look forward together with you in a more positive sense. Why is that? Well, it's been proven also through the pandemic how resilient our portfolio is and what kind of markets we are actually operating. These markets are fundamentally different than Western Europe markets.
When we look, for example, here at the consumption and the purchasing power actually of the markets we are operating in, you see that all these countries, the nine countries we are operating in, is quite above Western Europe, which is a saturated market, which does not have the same growth because purchasing power is not growing in the same pace as it does in Central Eastern Europe. That is what helps us actually to grow our business. If we did a comparison here actually of, again, the portfolio of NEPI Rockcastle and its countries versus the EU 27. It's in all these sectors actually, whether it's real GDP growth, consumer price, unemployment, the countries we are currently operating in are outperforming the rest of the EU 27.
Now, looking ahead, and what are we heading for? Especially as you have more of a new team now that is running actually together with our 450 colleagues in the countries, this company. First of all, of course, we want to leverage also in the future on, let's say, the strength we have within our in-house asset management. This is where we can create also within the 56 assets that we're currently operating, where we can create and will create more value for you as shareholders. Secondly, the consolidation actually or growing actually within the regions that we're currently operating in by acquiring additional assets or portfolios within the CEE region is definitely was a target in the past, but will stay a target in the past.
I think we also have potential in the future by looking into the western part of Europe. It's not a full-fledged plan at the very moment, but we're doing the research, and we're looking at where we can grow maybe into interesting markets, be it real estate and mixed-use markets, within Europe. We have seen, and that's also a fact over the last two years, that acquisitions within our regions that are accretive to the quality of portfolio that we are operating, that has been quite challenging.
Not a lot of product has been coming to the market where we would say, "This reaches actually up to the quality level that we are expecting to bring to the portfolio." I think it's just a logic that we, let's say, look around into our neighboring countries in Western Europe and source whether we see possibilities for growth there in the future. Not only acquisitions, that is the hot point, that is actually delivering on our development pipeline. I think this is something that NEPI Rockcastle can be quite proud of, because not a lot of real estate companies, especially real estate, are currently doing a lot of developments. Now, what is our pipeline? EUR 610 million that we have currently only in the section of investment for permitting, in permitting and construction.
I think this is quite a substantial number, and we want to deliver this project actually until the end of Q4 2025, step by step, asset by asset. This means a growth actually in GLA that is creating an additional NOI for you as investors as well. Obviously, 224,000 sq m that will come to the market over the next couple of years. Let's go a little bit more into details of what we're talking about here. Number one, you heard it, Focus Mall Giulești-Băneasa is actually the extension of a shopping center, but we've refurbished at the same time the whole asset. We've extended by 15,000 sq m, and it's actually now under completion, and Marek, you were able to actually have a leasing activity here. Up to 95% of the asset is already let.
Bonarka City Center, one of our core assets, the biggest asset actually we have in Poland, which is a 100,000 sq m scheme, which gets currently refurbished, will take until Q4 2024. There we have been adding, and Marek said it already, we have been able to add an important retailer, as an anchor, Primark, to this asset. This is under progress at the very moment. The next one that is also related to this EUR 610 million investment is a greenfield development in Craiova. Well, Craiova is in Romania, for those who are not so familiar.
It's a city of 300,000 inhabitants, has a catchment area of more than 600,000 inhabitants, but it's a white spot on the map when you look at it from a retail perspective, as we are not facing any serious competition here. That's why we said, and that's why the plot was acquired, and that's why we started now actually. Construction is already ongoing for a 50,000 sq m scheme, and we're hopeful to deliver this by 2023. The next one is Promenada Mall. I mean, that is obviously right next to our headquarters. We can see it every day, and we are so happy now. After six years, finally our team was able to achieve the building permit. It was not an easy task.
We already started here with the construction, and we will increase actually by another 58,000 sq m. This is a mixed use. We'll optimize actually the retail part. The plot was already bought, so we are expanding it now to the side, and we will have on top of this an office building. In total, it will be somewhere around 100,000 sq m of GLA that we're looking at. This will take a bit of a longer time because we will start digging I think, like, in 14 days, but it will take some time for this to be completed. What is the next one? Residential. Well, as said, we are not a residential developer, and we don't want to become, let's say, a fundamentally a residential developer.
Wherever we have a plot that is adjacent to our retail and cannot be used for retail or is better to use for residential, that's obviously where we want to lift additional value for our investors, not just having the plot around and doing nothing. In that case, here in Bucharest, we are actually constructing currently, and we are already getting out of the ground 18,300 sq m, so 252 apartments that are there for sale. This is built for sale and not built to lease because in the Romanian market, this does not really exist to lease. Everything gets built and apartments get sold one by one. It's expected to be delivered in 2023. It's not really a secret that we have already sold 41 of these plots ongoing.
I think absolutely on the prices that we have been expecting, and we're expecting actually this to grow as the market is pretty hot. Promenada Plovdiv, this is under permitting. Plovdiv is the second biggest city actually in Bulgaria. We are currently with two big assets, as you know, in the capital. Now we are expanding to the second biggest city in Bulgaria with a scheme of almost 58,000 sq m. It's in the heart of the city. We are very hopeful here to receive the building permit throughout this year to start construction and then actually might deliver this project at the end of 2024. I think this is an impressive pipeline only on developments, and I think of future income that is then distributable to you as our investors.
Now, having an outlook to 2022, we've talked about obviously the risks that we see that are always around us in this world. Currently, we see that we have some serious issues between the Russians and the Ukraine. This obviously is something we did not and we cannot factor in at the very moment. We are positive, as said. Looking especially at the fact, and actually Mark didn't mention it, but we see now throughout all our jurisdictions that governments are planning now to even lift restrictions on pandemics even more. You see it in the presentation that, for example, in 2021, especially let's say our entertainment part and food courts, they were still quite heavily infected because there were restrictions on capacity.
You could go to a cinema, but they could only have 50% of the seats full. That has impacted our business obviously still. Also, the food courts, you know. Entrance into shopping centers in Bulgaria and Romania by the end of the year, November, December, you could only enter if you would show your green pass, right? Your vaccination certificate. This has impacted our business. Now, if we look at this maybe positively that this is now fading away and that more and more countries, especially I think, Poland just recently announced that they will very soon lift all restrictions. Maybe you still have to wear your mask, but that's fortunately it.
This will obviously help our business again to grow in the next months and until the end of the year, if we don't see any further, let's say, new disruptions there. That's where we think we should be hopeful and we can be positive about the future. That's why we say we'd like to maximize, obviously, our NRI, which increases then the DPS to 24% as an outlook. Execute on development pipeline. I think I've just said that, this is one of our big targets obviously, not only to talk about projects, but also to deliver projects. That's where our development team is very busy, but I'm very positive about it.
Actively looking for investment opportunities, not only in the CEE region, but also, let's say, doing our research within Western Europe where to see where there are opportunities coming up. Successful implementation of relocation of parent company. We're moving now from the Isle of Man to the Netherlands, and it's a thought-through process, but it's not an uncomplicated process. That's definitely a point, the investors, where we would need also your support in the future in the EGM to make this happen and to let this support actually all the thinking and doing we have for the future of the company. Improve ESG performance. I think Eliza elaborated on this quite deeply, but I think we all know that this is a factor that becomes more and more important also for the real estate business.
Let me say openly, we don't believe that we are 100% there yet. The team is working hard on this and we will also, let's say, invest into this topic also by, let's say, doing some hiring here, and we will improve on this over the next 12 months. This is one of our core targets to achieve over the next 12 months. Of course, we stay prudent, and we want to maintain actually the strength of our balance sheet, good liquidity, and keep our BBB rating. That's for sure as well. I think this was the presentation so far. It has been a pleasure. Thank you all for listening.
I would like to give a chance now to all of you here in Johannesburg, but as well, on the phone, as I said, there are dial-in numbers or via your screen. Should be on the right, a button to join us online. So feel free for questions. I would like to ask Eliza and Marek maybe to join me here, in front, and we are happy to answer your question. Maybe we start here with the audience in Johannesburg. If you have questions to the presentation or something, feel free to give us a question.
not only in Johannesburg, so maybe we have somebody sitting in front of his laptop and hearing and listening, and maybe you noted down some questions or more details to a subject, and we are happy to give you answers as much as we are able to. also when you are on your phone, just write us an email. We have the emails right here, and we can answer immediately. happy to have questions.
The presentation must have been quite.
Very, very clear.
Not too many questions here.
Yeah.
Those on the phone, if you'd like to ask a question, press star one. And there are no questions at this time. Be happy to return the call.
It's not working.
Once again, that is star one if you'd like to ask a question, star one. We'll take a question from Jakub Caithaml of Wood & Company. Your line is open.
Maybe I can take one question here that just came in. Just came in, and I will read the question for you so I think everybody's aware. Hi, what level of concessions are you budgeting for 2020? And if not asked before, what do you think the Ukraine situation will have on your assets? Maybe start with the second part of the question, asset. We don't see any direct impact currently on our operations for our assets in none of the countries, as we are not operating actually in Ukraine currently. We are also, let's say, not affected in a way which we obviously thought of. If you have an asset that is, for example, pretty close to the border, you might have so-called tourist shopping.
Meaning people coming over the border because, you know, it's a different currency, and it might be favorable, and it's just in the catchment area. Fortunately, this is also not the case. Our assets, the closest actually is Galați in Romania, and that's still so far away from the border. We are not expecting any direct impact here. But I think it would be looking into a crystal ball if you would ask me, okay, what kind of impact this would have overall in the near future on the economies generally in Europe.
I think it's wise for us to follow and monitor the situation as sanction will obviously come in from the western side, and then to see also the reaction from Russia. I think it would be I think not really wise for me to try to give you any answer on that question. Now, when it comes to the concessions for 2021, we have been budgeting obviously, because we need to be cautious. The pandemic isn't over. We know this, and we know that when Omicron hit us, we saw another wave coming over, and the reactions of governments.
Obviously, I think we should be cautious, careful looking into 2022, and that's why in our budgeting at least we have forecasted some concessions for 2022, but at a much lower amount as we have been providing them in 2020 and in 2021. That is actually covered in the 25% of growth that we see on the DPS for the coming year. I hope this answers your question.
The next one I think is rather for Marek.
Next question. Can you please elaborate on the cost creep you are seeing in the portfolio, labor cost, et cetera? Well, it comes as no surprise. It is a trend that continues for a few years that we have labor cost increasing. Now we can see the utilities cost increasing as well. The way our model is structured is that most of the costs we are able to reconcile with our tenants because we manage properties for them. Of course, one of the strategic initiatives for this year is to keep a laser sharp view on our costs, and you will see how the operational change to being able to actually centralize various acquisitions we do on our highest OpEx elements so that we can at least limit the growth of the cost.
I think this is one of the challenges for this year.
Can you comment on the tenant churn and retention given 40% of the leases signed were new leases?
Tenant churn. That refers to?
That refers to the slide with 39% of new leases.
First of all, for 40% of tenants that we change, you need to put into perspective. When we say we have 40% of new leases, that means that not only are we changing the tenant mix into better tenant mix, first of all, but with the same comes reconfiguration of the GLA as well. We would relocate tenants to rightsize them, actually. A tenant wants bigger space, so we would do so in order to free the space for other tenants who want to enter. Very often, we would merge neighboring unit, or we would actually create new GLA, et cetera, et cetera. That all leads to improving the tenant mix. There was question as well on the rental reversion somewhere. It's very difficult to calculate because of all the reasons I've just mentioned.
It's not just turning one tenant to the other. I think the right statistic to look at is the base rental increase year-on-year, and that's over 3%, 2021 to 2020, and that excludes turnover and overage rent, which is purely a function of the successful operation of tenants. That proves that we are not definitely losing money on improving our tenant mix. We are actually making it better, and we can see benefits of that. I hope that covers the question.
Maybe let me add here that if you look at total number. Total number of contracted rent, 2021 versus 2020, that's stable, and we have even increased the total number of contracted rent versus the former year. So if you put it in a nutshell, we don't see actually that we have difficulties to reach rent levels as before or higher. I think the question was a very good question on the cost side. On the cost side, you know that we charge the tenants the costs of the asset mainly, and there is a smaller part which is then affecting actually our P&L, which are non-recurring, which are costs that we cannot hand over to tenants.
That is the part where we obviously have seen now growth of costs, especially due to, as my colleague stated, especially on minimum wages that have been going up tremendously in all over Europe, but especially Central and Eastern Europe. Secondly, of course energy prices. I mean, I think everybody heard about it, and that is really an increase of 40%-50% that we see throughout the portfolio. That is of course, we need to be careful that, let's say, these service charges covering the cost for tenants wouldn't become a second rent for the tenants and a too high burden. That's why we need to work on it. That's why we need to focus on this subject even maybe a bit more. We'll always focus on the rents, don't worry about it.
We will definitely focus also on the fact that we need to have reasonable cost per our tenants in order for them to afford to pay a really good rent to us. That's maybe closing this subject. There was another question was related to. Can you give that to me?
The sectors.
What sectors, retail, office, logistics, would you look at moving into Western Europe? Basically, I mean, we are a retail company, and that's the heart of our company, and I think we'll always focus, in the first instance, obviously, on what we know, on how we do it. I think NEPI Rockcastle would say also if you would move into Western Europe, definitely a retail driven company. At the same time, Western Europe markets are working a bit differently, number one. Number two, there is a big trend, obviously, especially on the investor side, to look not only into pure retail, but to diversify, let's say, your risk. Then we would definitely also look into mixed-use projects, where the core of the product is retail. Why don't, why aren't we able to add hotel, residential and offices?
I think we have the capacity to do so, and that's maybe the answer to the question. In the first instance, obviously, we're looking at retail assets, but if we have a chance, let's say, to move into projects, or products which also have a mixed-use component, I think we would definitely have a look at it.
I understand that we have a question via phone.
We have a question from Jakub Caithaml of Wood & Company. Your line is open.
Hey, this is Jakob from Wood & Company. Thanks for taking the question. I tried to submit it also through the chat, and it threw me an error, so sorry in case you've already answered it. I was trying to dial in in the meantime. I wondered about the new leases and whether they are keeping up with the inflation, and maybe in broader sense regarding the contracted rent level, what would be a good estimate for 2022 versus 2021? That would be the first question.
I understand the question was about indexation. Yes, all the agreements are euro indexed. They just follow indexation. We all know what it was in Europe, so the rents will follow. I didn't get the second part of the question. If you could repeat.
Right. What I was rather asking about is when you are closing new leases, how would new leases which have come to an end, how would the rent in these leases compare to the one which was in place prior, and whether that is keeping up with the inflation?
Of course, yes. The agreement, if we should assume we have the same tenant for the same unit extended for another period, then of course with the extension comes inflation on top of that. If this is the tenant's option. If the lease expires, we will sit and discuss, and getting inflation is the minimum we can get. Very often, we would be able to actually get the rental higher. But we don't see any issues with prolonging the agreements on the current terms, plus indexation, which will be quite substantial this year. Yeah, I hope that answers the question.
Perfect. That's very helpful. The second-
Yeah, that relates to inflation, that obviously we are benchmarking us against EU, but inflation through our countries is different and whether this could give us a squeeze actually on our margin. Actually, in principle, I would say inflation is not our enemy. Inflation is rather our friend when it comes to lease agreements. Because as we are related immediately to an increase of rent, I think this is not a threat in general. Inflation obviously also has other effects. It has effects obviously on our cost side, as we said, when of course we see now prices going up, especially on utilities. If you take the comparison, obviously, on our total rent and our total cost, then I think we can live with the burden on the cost side with the inflation increases.
Of course, as I said, we need to take care of it and have a close look into it and try to optimize it. This is not a question. Actually, inflation is rather a driver of our business, and it's putting our business down, depending also a little bit, obviously, on how it affects purchasing power of our clients. If you spend too much, let's say, on your utility bills, then you might not buy a new dress. It has a couple of, let's say, reactions to us. In general, it's not something that we would take really as a concern at the very moment, at least.
There is a question in relation to the guidance on the distributable earnings per share for 2020, whether we base our 24% increase to the normalized distributable earnings per share or to the reported one. In all the announcements and the financial statements, we mentioned that at least 24% is based on the reported distributable earnings per share of EUR 34.42. We received a few questions in this direction. Another one for you Rüdis, is whether we are considering any further disposals.
No, not at the very moment. I mean, we have a plan of rotating assets which actually are not maybe contributing in the future, especially as much the growth of NOI, as we would expect. They're, let me say it a little bit, in this way, they are squeezed out. Actually, you do not really see here a possibility to create more, let's say earnings for the investors, and then we might think about switching these assets, selling them off, and then buying into something that, where we have, let's say, a better usage, to see. Also consider currently, the capital markets, the investment markets.
To go to the market currently selling off assets is maybe not the best moment, and that's why you also haven't seen a lot of transactions ongoing throughout Central and Eastern Europe, especially on retail real estate. There was a hype, obviously, on everything that was industrial and also on residential. If you look at transactions over the last two years on retail real estate, and this was really flat, and if there were transactions there more, not related as much to the typical, let's say, core shopping centers that we are operating, it was more in the region of retail, smaller retail parks. For now, we are not planning actively any disposals.
We're expecting NOI to be stable on that side, but rather an increase actually, our results with the 56 assets that we're currently operating.
My understanding is that we have also another question on the phone.
We do. We have a follow-up from Jakub Caithaml.
Okay.
Of Wood & Company. Your line is open.
Hey thanks. I didn't realize I indicated, but yeah, I had one more question regarding the total occupancy cost ratio, especially with regards to the service charges and the utilities bill. Can you roughly estimate where would the total bill for the tenants on average be in your portfolio now in 2022 versus 2019?
Maybe it helps to go through this a little bit historically. If you look at our OCRs, which are actually covering rent plus service charges, so total cost of tenants versus their turnovers, this is actually, let's say, the KPI that we would obviously look at. If you see that, then actually, NEPI Rockcastle had a very favorable KPI compared, for example, to Western Europe. In 2019, it was at 12.5%. Now, with the crisis coming, with the pandemic crisis, actually, we have been seeing this rising obviously above 14%, even after we have been providing concessions, discounts to tenants. You can also see that we were not, let's say, providing too much money.
They were also suffering, and they had to spend money on the pandemic because their overall costs were increasing while turnovers obviously did not turn out to be as well. In 2019, 12.5%. In 2020, we were above 14%, and now we are actually almost back to the old times. Meaning now we are back to 13%, and that is due simply to the fact that turnovers came back actually more or less immediately after restrictions were lifted. If we take this forward now into 2022, of course, we are hoping here with further restrictions being lifted, that we actually come back to our 12-12.5% OCR, which is very, very healthy for our tenants throughout the portfolio.
There is another question on elaborating why we are considering entering Western Europe and whether we consider that we missed any opportunities during the pandemic in relation to acquisitions.
Happy to answer. Very good question. Thank you. Let's start again with the second part. Did we miss anything in the market? I think that Anka, and she's here today with us, and her team, and the whole team of NEPI has been drilling the market in Central and Eastern Europe on where there are opportunities actually to acquire additional projects or portfolios. Believe me, they have been very, very busy. Fortunately, on the other side I think we have a very well-organized and very confident investment committee team, which is sourcing this together with us. I have to say, we have been on all deals that came to the market, but none of them actually were, let's say, as interesting as we would expect them to.
I don't think that we have missed out on chances, and I also sometimes believe it's better sometimes to do nothing than to do something. Meaning, why should we? Okay, I know we have big liquidity, and we should put the money to work, and we want to put the money to work for your benefit, but we should do it with long-term thinking and not a short-term thinking. That's why we are focusing more on quality that is accretive to the quality that we currently have than just buying into an asset just to, let me say it this way, tick the box. That's not what we're looking at, number one.
Number two is that looking into Western Europe, we think there could be opportunities in the future, and we are starting this project at the very moment, and we cannot give you any outcome here yet because we're just starting with this. There will be. I think there will be also opportunities in Western Europe also for a company like NEPI Rockcastle, opening itself up, let's say, to these markets, getting more knowledgeable and maybe become a move into this market also as partners, whatever. So it's just a way, let's say, to think about the growth of the company and not to exclude this thought and this idea to look also in new markets. I think we shouldn't exclude this. We are a very strong company.
We have all, let's say, the tools in order to do this. Therefore, that's the way, a part of the way we're looking into the future. Do not forget, at the same time, we will definitely also work on the markets we are currently working in, not only with acquisitions, but also with the development pipeline currently of around EUR 600 million, which I think is quite a big number to achieve this and to bring these assets to life in order to create new income.
We are done with the questions, Jaime.
All right. I would simply ask, are there more questions maybe here in the room, Johannesburg, but you're also welcome by phone. Something more maybe on your laptops, screens. If not, I would simply say a big, big thank you to all of you joining today's presentation. You see here, except of Mark sitting here already for years. The young lady next to me and myself being the new kids over in the block. I may say this, maybe it's a pleasure to have you here today, and we are looking forward actually to, let's say, get a much closer relationship to each of you over the next coming days, weeks and months.
Maybe not just you only here in South Africa, but we are planning actually, and you're really well invited to come with us on a property tour during this year. If you can make it to Europe, would be absolutely our pleasure, not just to talk about assets, but maybe to visit assets and to see also construction sites and what we're doing and how this company is growing. It will be our great pleasure to welcome you wherever within our jurisdictions, whether it's Warsaw or you know, in Romania or Bulgaria, it doesn't matter. So we are highly invited to see us. I'm definitely looking forward to work with you and for you together with my whole team. With this maybe I end this presentation, and I wish you all the best.