Favourable structural market conditions continue to support strong growth and performance for Fortress Real Estate Growth and Fortress Real Estate Investments.
Johannesburg, 27 February 2026: In its interim results for the six months ended 31 December 2025 (1H2026), the real estate investment company reported low vacancies across its portfolio. The company also noted growing interest in direct property assets. This demand is driving price growth and improving capital market sentiment.
For the period ended 31 December 2025, Fortress Real Estate Investments recorded like-for-like net operating income (NOI) growth of 7.0% in its core retail portfolio and 6.6% in its logistics portfolio. The company also benefited from positive lease-reversion income from lease expiries.
Fortress Real Estate Growth Supported by Strong Portfolio Performance
Fortress owns a direct property portfolio valued at R38,7 billion. This portfolio includes logistics properties in South Africa and Central and Eastern Europe (CEE) valued at R24,1 billion. It also includes a direct retail property portfolio in South Africa valued at R11,9 billion. In addition, Fortress holds a 14,2% interest in NEPI Rockcastle.
“We expect the prevailing market dynamics to translate into better valuations and continued higher asking prices for assets. This outlook supports our portfolio of quality core assets,” explains Steven Brown, CEO at Fortress Real Estate Investments.
All disposals after 30 June 2025 closed at a premium to the most recent formal valuations. These sales also achieved a 4,9% premium to book value and generated R271,5 million in gross proceeds.
However, Brown says the improving market conditions support a more patient strategy when disposing of non-core assets. The company declined several offers during the period under review, even though those offers were at significant premiums to book value.
“Given the improving demand for these assets, timing is key. This shift in approach was intentional to allow market expectations to align with our view that the current value of our non-core assets is above our own book values.”
“We expect the market prices to continue firming during the course of the year following additional interest rate cuts and improved market confidence,” adds Brown.
Market Demand Driving Fortress Real Estate Growth
Strong demand and favourable supply conditions also supported the company’s financial results. Portfolio vacancy rates by rental declined from 3,4% to 2,8%.
Brown highlights the extremely low 0,3% vacancy rate in the South African logistics portfolio. This figure reflects strong demand for premium-grade logistics facilities.
Brown also notes that the company continues developing new facilities in key nodes. Most of these developments are already pre-let, and only limited speculative space is entering the market.
“Tenants are also remaining in their existing facilities due to a lack of alternative choices. The benefit of this is seen in our positive logistics rental reversions of 7% for this period.”
Retail Portfolio Performance and Operational Efficiency
Tenant turnover growth in the retail portfolio reached 4,6% for the 12 months ended 31 December 2025. This performance remained ahead of consumer price inflation for the period.
Operational efficiency improvements at retail centres also contributed to stronger performance and NOI growth in the retail portfolio.
The company also reduced its loan-to-value ratio to 38,1%, compared to 39,1% at 30 June 2025.
“Utility management continues to be a key operational focus area on the back of the challenges presented by local municipalities, their service delivery and ongoing administrative issues,” explains Brown.
These initiatives include additional solar installations, water backup systems, and data-driven efficiency programs.
As at 31 December 2025, Fortress operated 103 solar PV plants, including three in CEE. These plants provided an installed capacity of 36,75MWac. At 30 June 2025, the company had 96 plants with 35,49MWac capacity.
“Our aim is to have 120 operational plants, with a target of 40MWac by 30 June 2026,” states Brown.
Financial Results and Shareholder Returns
The strong first-half performance of FY2026 also delivered distribution per share growth of 15,4% for 1H2026 compared with 1H2025. The company also upgraded its distributable earnings guidance. Total distributable earnings are now expected to be approximately 10% higher than the previously guided range of 7,3% to 8,8%.
Distributable earnings for 1H2026 increased by 16,8% to R1,07 billion compared with 1H2025. Based on the 1H2026 performance, the Board of Fortress Real Estate Investments declared an interim dividend of 87,89 cents per share.
Shareholders may also elect a scrip alternative. This option allows them to receive additional Fortress Real Estate Investments Ltd (JSE:FFB) shares. These shares will be issued at a 3% discount to the prevailing volume-weighted average price (VWAP), less the interim dividend.
“Our 16,7% growth in distributable earnings and 15,4% increase in interim distributions reflect the strength and quality of our core portfolio, disciplined capital allocation, and improving operating environment,” concludes Brown.
Outlook for Fortress Real Estate Growth
With improving market confidence, low vacancies, and ongoing demand for premium logistics and retail assets, Fortress Real Estate Growth continues to benefit from strong structural market conditions and disciplined portfolio management.
