Fortress Real Estate Investments Limited (Fortress) has released a pre-close operational update highlighting solid performance across its logistics and retail portfolios with record-low vacancies and continued strategic asset recycling to progress its development pipeline.
WORDS & PHOTOS: SUPPLIED
These initiatives have resulted in growth in distributable earnings and reinforce the company’s long-term value creation strategy.
Fortress has reaffirmed its current forecast for distributable earnings of R1,930 billion for the financial year ending 30 June 2025 (“FY2025”), and has provided distributable earnings guidance for FY2026 of between R2,046 billion and R2,075 billion. This represents growth in distributable earnings of between 6,0% and 7,5%. On a per share basis this translates to R1,60 for the current financial year and between R1,70 and R1,72 for the forthcoming financial year.
This puts the shares on a dividend yield of approximately 8,5%, which is attractive given it is an after-tax dividend. Fortress is not a REIT so the 8,5% yield is a regular corporate dividend, unlike the other JSE listed property companies which are mostly REITs and which dividends are subject to normal tax in the hands of investors.
The Weskus Mall
Fortress logistics portfolio
Fortress’s logistics portfolio demonstrated strong performance, with high-quality, secure space in sustained demand. In South Africa, vacancies decreased from 1,5% on 31 December 2024 to 0,9% on 31 May 2025. Currently, 117 915 m² of new logistics developments are underway, with 73% pre-let.
“This 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,” said Steven Brown, CEO of Fortress.
In Central and Eastern Europe, the logistics portfolio remains resilient. Leasing activity remains steady, supported by new tenant take-up and pre-lettings at developments in Bydgoszcz, Stargard and Zabrze. These parks attract long-term leases from high-quality tenants and continue offering value through expansion.
Retail operations
Retail operations remain stable despite a challenging consumer environment. Like-for-like tenant turnover increased by 4,0%, maintaining a low vacancy rate of 0.9%. Strategic refurbishments and extensions at key commuter-focused centres drive this healthy performance. Recent upgrades at Sterkspruit Plaza and Bloem Value Mart have contributed positively to performance.
Underperforming assets
Fortress’s ongoing strategy of recycling underperforming assets has continued to deliver. During the current financial year, the group disposed of non-core properties with a combined book value of R1,39 billion, generating proceeds of R1,44 billion, representing a premium to book value of 3,0%. These proceeds have been reinvested into strategic logistics and retail developments, further enhancing the portfolio’s earnings potential.
Fortress has grown its operational solar PV capacity to 32,91MWac and targets 35,54MWac by 30 June 2025. From July 2024 to May 2025, solar energy generation nearly doubled year-on-year to approximately 39,765 MWh, demonstrating the positive impact of Fortress’s renewable energy rollout.
Fortress maintains a solid funding and liquidity position. In May 2025, the company raised R820 million under its DMTN programme and refinanced R4,2 billion in bank facilities at improved pricing. The group’s balance sheet remains strong with R5 billion in cash and available facilities and a loan-to-value ratio of 39,8%, comfortably within covenant limits.
“Fortress remains focused on enhancing its core portfolio’s quality and earnings capacity while progressing development activity, keeping our vacancies low and optimising capital allocation. These efforts are expected to continue driving growth in distributable earnings and delivering long-term value to shareholders,” concluded Brown.
Top picture: Cornubia Ridge Logistics Park.
