SPP Group Reports Higher Profit

The Shopper Park Plus Group's profit after tax for the first nine months of 2024 amounted to EUR 16.1, significantly higher than the EUR 8.3 million profit in the same period of the previous year, due to a property revaluation gain, also due to new leases signed. The SPP Group's gross profit improved by 10.5% in the first nine months of 2024 compared to the same period of the previous year, driven by both an increase in rental income and a decrease in operating loss, according to the executive summary published on the website of the Budapest Stock Exchange.

The focus of the Shopper Park Plus Group's business in 2024 will be to capitalize on the business opportunities opened up by the exercise of the option to redeem part of the TESCO leasehold space. Of the 30,000 m2 of leasable area covered by the option, 20,000 m2 have been leased until 30.09.2024. The applications for change of use of the areas covered by the option have already been accepted by the competent authority in six locations, while planning and preparation are still ongoing in two locations.

Signing of contracts with new major tenants, that are instrumental in shaping the tenant mix, has been largely completed. New leases have been signed in the first half of 2024 with Praktiker for 5,500 m2 at the Debrecen Kishegyesi location, with Sinsay for 6 locations and with Jysk for 2 locations. KOTON plans to open stores in 7 locations, contracts are being signed.

Most of the amounts payable under the purchase price retention agreement for the acquisition of the properties have been paid, the Group has a related liability of 1.4 MEUR under current liabilities. The release of the land taken over with a call option involves additional significant expenses due to development costs, which the Group is realizing on a scheduled basis.

On October 10, 2024, Shopper Park Plus Plc. announced its intention to acquire four retail parks operated by TESCO in Slovakia. The total leasable area of the four retail parks to be acquired amounts to 72,000 m2. SPP plans to raise the necessary funds through a private placement.

Regarding financing opportunities, a possible revolving credit facility of up to EUR 30 million under the existing bank loan agreement or a possible private or public capital increase could support the regional acquisitions outlined in the strategy, if retail parks matching the existing real estate portfolio become available at a suitable price in the future.

Significant variables in the market environment that affect the Group's performance and plans include retail sales trends, tenant expectations, yield levels, inflation and energy price changes. With a moderate increase in retail sales, tenants remain cautious in their store opening decisions. Yield levels that are significant to the company's operations: the 3-month Euribor, the 5-year interest rate swap have declined in the first nine months of 2024, improving the operating environment. Falling inflation is a negative for the Group as it reduces inflation-indexed rental growth. Energy prices have decreased compared to the same period last year, improving the operating environment for tenants as well as the Group.