Fortress Delivers 30%+ TSR, Leans Into Logistics

• 30%+ total return; DPS 162.44c; shares now around 10% discount to NAV, versus >20% at FY start.
• Portfolio >R50bn: two-thirds SA/CEE logistics; one-third SA commuter & convenience retail; NEPI Rockcastle stake R15.8bn.
• Vacancies 3.4% overall; logistics 0.4%; retail NOI +9.4% y/y; 96 solar PV sites; 100m kWh generated since 2017.

Market context

‍Rate cuts and firmer fundamentals lifted global and South African real estate through FY2025. Capital rotated back into direct property, supporting valuations and compressing listed discounts, especially for platforms with clean balance sheets, low vacancies and real operating momentum.

Fortress at a glance

‍JSE-listed Fortress Real Estate has executed a multi-year pivot away from offices, underperformers and non-core assets into state-of-the-art logistics (South Africa and CEE) and defensive commuter, convenience retail (South Africa).

A 2024 shift to REIC status and a simplified capital structure improved tax efficiency and strategic flexibility. The group holds around R22.7bn in logistics and +-R11.8bn in retail, plus +-R15.8bn in NEPI Rockcastle taking real-estate exposure to >R50bn with a significant development pipeline.

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“The favourable turn in market dynamics and our cleaner capital structure underpinned a rebound in valuations and returns. Investors have come back to direct real estate; our portfolio’s like-for-like valuation rose 6.5% and our shares narrowed the discount to NAV,” says Steven Brown, CEO.

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‍“We remain focused on quality earnings: best-in-class logistics, strong commuter retail, disciplined development and sustainability to drive distributable growth.”

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Results snapshot (FY2025)

• Total shareholder return: >30%.
• Vacancies: 3.4% overall; logistics 0.4% (record low).
• Retail performance: like-for-like NOI +9.4%, materially above around 3.0% inflation.
• Distributions: R1.956bn total; DPS 162.44c (Interim 76.15c, Final 86.29c).
• Scrip option: final dividend alternative via NEPI Rockcastle shares (ratio 0.678 per 100 Fortress B shares).
• Balance sheet/valuation: shares at around 10% discount to NAV (from >20% at FY start).
• Energy & ops: 96 solar PV systems (+37 YoY); 100m kWh generated since 2017.
• Development engine: in-house teams delivered around 70% of current logistics GLA; +-210,000 m² remaining over four years, largely in CEE.

Strategy going forward

• Double-down on logistics in SA & CEE; keep retail weighted to commuter/convenience nodes with proven footfall and turnover growth.
• Prune and reinvest: dispose of underperformers; recycle into higher-yielding developments and asset upgrades.
• Keep friction low: sustain near-zero logistics vacancies and drive operational efficiencies (renewables, smart maintenance).
• Capital discipline: maintain a simplified structure and targeted capital allocation with REIC tax benefits.
• Guidance: forecast 6.0%–7.5% growth in distributable earnings per share for FY2026.

Bottom line

Fortress is executing where the cycle pays modern sheds and everyday retail, while funding itself smarter. Narrowing discounts, rising DPS and a deep logistics pipeline keep the flywheel turning.

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