Fortress is a real estate investment company with a diversified portfolio of high-quality logistics and retail assets located in South Africa and Central and Eastern Europe.
Image: File picture: James White
Fortress, a real estate investment company with a diversified portfolio of high-quality logistics and retail assets located in South Africa and Central and Eastern Europe, in an update on its operations for the period subsequent to December 31 2024 said on Friday that the logistics sector continues to demonstrate strong performance, with high-quality, secure space in sustained demand.
Fortress reaffirmed its current forecast for distributable earnings of R1.93bn for the financial year ending June 30, 2025 and provided distributable earnings guidance for 2026 of between R2.046bn and R2.075bn, representing growth in distributable earnings of between 6% and 7.5%.
"Vacancy rates remain low across the portfolio, highlighting the attractiveness of our assets. Currently, 117 915m2 of new logistics developments are underway, with 72.7% pre-let. This strong letting activity reflects the superior quality of our facilities, which feature best-in-class flooring, expansive yards and 15-metre eaves heights – allowing for increased racking and warehouse volume. These properties also benefit from excellent connectivity to key transport networks, supported by well-established infrastructure," it said.
Despite a challenging consumer environment, Fortress said its retail portfolio has delivered like-for-like tenant turnover growth of 4% and maintained a low vacancy rate of 0.9%. "This healthy performance is driven by the continued success of asset management initiatives and recently refurbished and expanded centres. We remain committed to ensuring our retail portfolio remains relevant, attractive and competitive for both consumers and tenants," it added.
Fortress said its strategy of enhancing the performance of core assets while disposing of underperforming properties has continued to yield positive results. So far this financial year, it has disposed of non-core properties with a combined book value of R1.39 billion, generating proceeds of R1.44bn, representing a premium to book value of 3%. These proceeds had been reinvested into new logistics developments and strategic retail upgrades and extensions.
As of the reporting date, properties with a combined book value of R147 million are classified as held for sale, it said.
At the group level Fortress said it maintains strong liquidity, with R5bn in cash and available facilities.
"Our financial position remains solid, with a loan-to-value (LTV) ratio of approximately 39.8% as at the date of this announcement, comfortably within all covenants," it said.
BUSINESS REPORT
Visit: www.businessreport.co.za