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Audited financial results for the year ended 30 June 2025 and prospects
Fortress Real Estate Investments Limited
Incorporated in the Republic of South Africa
Registration number: 2009/016487/06
JSE share code: FFB
ISIN: ZAE000248506
LEI: 378900FE98E30F24D975
Bond company code: FORI
("Fortress" or "the group" or "the company")
Audited financial results for the year ended 30 June 2025 and prospects
"Fortress is a real estate investment company with a portfolio of high-quality
logistics and retail assets. We own a portfolio of logistics properties in South
Africa and Central and Eastern Europe valued at R22,7 billion and a portfolio of
retail properties of R11,8 billion, all located in South Africa. In addition, we
currently hold approximately R15,8 billion in NEPI Rockcastle shares, which
provides exposure to an outstanding retail portfolio in Central and Eastern
Europe. Combined, these holdings provide shareholders, through a listed and
liquid share, with exposure to a portfolio of real estate assets in excess of
R50 billion with a significant development pipeline, paying regular after-tax
dividends.
The real estate market, both in South Africa and globally, has retained the
momentum gained from the reduction in interest rates and better market
fundamentals becoming evident in the latter part of 2024. Investors have
returned to the direct real estate market, and this has provided an underpin
to our direct valuations, which have increased by 6,5% from FY2024 on a
like-for-like basis. The return of investors has also been seen in the listed
real estate market, with our shares currently trading at a 10% discount to
NAV, from over 20% at the start of the financial year.
We continued our focus on a higher-quality portfolio, with the benefits
thereof being evident in our performance for FY2025 and an improved outlook
for FY2026, for which we forecast growth of between 6,0% and 7,5% in
distributable earnings per share.
Our development team again contributed meaningfully to our performance and
reached a milestone with 70% of our current logistics properties having been
developed by our own teams in South Africa and Poland. Our reputation for
delivering high-quality, prime logistics space for tenants continues to grow
and add value to our business.
The retail portfolio delivered strong like-for-like NOI growth of 9,4%,
which is materially above the inflation rate for the year of 3,0%. This
portfolio contributed 35% to our total NOI, and remains a significant driver
of our growth. Our focus on enhancing our retail centres, which are trading
well and have growth potential into the future, combined with disposing of
underperforming centres, has contributed to the outperformance.
Our total distribution for FY2025 of R1,956 billion is an increase of 9,4%
on the prior year. This resulted in a final dividend of 86,29 cents per
share for 2H2025 in addition to the 1H2025 interim after-tax cash dividend
of 76,15 cents per share paid in April 2025. The total distribution for
FY2025 amounted to 162,44 cents per share, with a total shareholder return
in excess of 30% for the financial year. In order to facilitate more
optionality for our diverse shareholder base, an option will be available
to shareholders to receive the final dividend of 86,29 cents per share in
cash or, alternatively, at the shareholders' election, to receive the
dividend as a scrip dividend in the form of NEPI Rockcastle shares at a
ratio of 0,678 for every 100 Fortress B shares held."
Steven Brown, CEO
Nature of the business
Fortress is a real estate investment company with a focus on developing
and letting premium-grade logistics real estate in South Africa and
Central and Eastern Europe ("CEE"), as well as growing our convenience
and commuter-oriented retail portfolio. Fortress owns a direct property
portfolio valued at R37,4 billion which includes R22,7 billion of
logistics real estate and R11,8 billion of retail real estate. Fortress
holds, at the date of this report, a 15,2% interest in NEPI Rockcastle
N.V. ("NEPI Rockcastle"), the largest listed property company on the
JSE Limited ("JSE"), currently valued at R15,8 billion.
Distributable earnings
Distributable earnings amounted to R1 039,1 million for 2H2025,
compared to R835,6 million for 2H2024. Full-year earnings for FY2025
amounted to R1 956,2 million, compared to R1 788,5 million for FY2024.
The board has declared the full distributable earnings available for
2H2025 as a dividend, which amounts to 86,29 cents per FFB share.
Shareholders may further elect to receive the 2H2025 distribution in
cash, as the default option, or in the form of NEPI Rockcastle shares
held by Fortress in a ratio of 0,00678 NEPI Rockcastle shares for
every FFB share. Full details of the alternative will be communicated
to shareholders in due course.
Summary of financial performance
Jun 2025 Jun 2024 % change
Distributable earnings
(R'000) 1 956 238 1 788 505 9,4
Interim dividend declared
per share - FFB (cents) 76,15 81,44 (6,5)
Final dividend declared per
share - FFB (cents) 86,29 70,19 22,9
International Financial Reporting Standards ("IFRS") information
Jun 2025 Jun 2024 % change
Revenue from direct property
operations (R'000) 4 816 203 4 383 507 9,9
Total revenue (including
revenue from investments)$
(R'000) 6 015 606 4 383 507 37,2
Net asset value ("NAV")
(R'000) 30 430 774 29 865 807 1,9
NAV per share^ (Rand) 25,27 25,09 0,7
Basic earnings per share
- FFB (cents) 222,87 370,03 (39,8)
Headline earnings per share
- FFB (cents) 36,00 121,02 (70,3)
$ Total revenue (including revenue from investments) for FY2025
includes dividends received from Fortress' investment in NEPI Rockcastle.
In FY2025, the investment in NEPI Rockcastle was accounted for as a
financial asset, carried at fair value, in terms of IFRS 9: Financial
Instruments. In FY2024, the investment in NEPI Rockcastle was accounted
for as an investment in associate in terms of the equity method.
^ The NAV per share is calculated as the total NAV divided by the
aggregate number of FFB shares in issue, less shares held in treasury.
SA REIT Best Practice Disclosure
Jun 2025 Jun 2024 % change
NAV per share (Rand) 25,15 23,85 5,5
Loan-to-value ("LTV")
ratio (%) 39,1 38,2 #
Funds from operations
(R'000) 1 934 926 1 957 364 (1,1)
# Percentage change not meaningful to disclose or not applicable.
Prospects
Our distributable earnings for FY2025 amounted to R1 956,2 million.
Furthermore, we provide distributable earnings guidance for FY2026
of between R2 073 million and R2 103 million, representing growth
of between 6,0% and 7,5% on FY2025 distributable earnings. Further
detail is presented in the table below.
FY2025 FY2026
Actual Forecast range
Total distributable
earnings (R'000) 1 956 238 2 073 000 2 103 000
Distributable earnings
per share (cents) 162,44 172,13 174,63
Forecast percentage growth
from FY2025 (%) 6,0 7,5
This forecast is based on the following assumptions:
Fortress-specific assumptions
- Our distributable earnings methodology will remain consistent with
that of prior periods, as previously communicated;
- NEPI Rockcastle maintains a 90% payout ratio and meets its
published distributable earnings per share guidance for its
financial year ending 31 December 2025;
- No material sales, or acquisitions, outside of our planned pipeline
occur which necessitate a revision to this forecast;
- There is no unforeseen failure of material tenants in our portfolio;
- Contractual escalations and market-related renewals will be
achieved with no major change in vacancy rates;
- Tenants will be able to absorb the recovery of rising utility
costs and municipal rates; and
- The current funding structure provided by the collar over
18,75 million NEPI Rockcastle shares remains intact for the full
period.
Macroeconomic and regulatory assumptions
- There is no unforeseen material macroeconomic deterioration in the
markets in which Fortress has exposure;
- There are no unforeseen adverse socio-political events in the
jurisdictions in which Fortress has exposure;
- There are no changes to current tax legislation in the jurisdictions
in which the company operates; and
- There are no interest rate changes by the European Central Bank or
the South African Reserve Bank.
The forecast has not been reviewed or reported on by the company's
external auditor.
Financial periods defined as follows:
- 2H2024 - Final reporting period for the six months ended
30 June 2024;
- 1H2025 - Interim reporting period for the six months ended
31 December 2024;
- 2H2025 - Final reporting period for the six months ended
30 June 2025;
- FY2024 - Financial year ended 30 June 2024;
- FY2025 - Financial year ended 30 June 2025; and
- FY2026 - Financial year ending 30 June 2026.
This results announcement is the responsibility of Fortress' board
of directors and is only a summary of the audited consolidated
financial statements for the year ended 30 June 2025 ("FY2025 AFS")
and does not contain full or complete details. Any investment decision
by investors and/or shareholders should be based on the FY2025 AFS.
The auditor, KPMG Inc., has issued an unmodified audit opinion on the
FY2025 AFS and notes the valuation of investment properties as a key
audit matter. The FY2025 AFS, including the audit report, have been
released on SENS and are available on the JSE cloudlink at:
https://senspdf.jse.co.za/documents/2025/jse/isse/FFBE/FY2025.pdf
and the company's website at: https://fortressfund.co.za/financials/
view-pdf?id=Annual%20financial%20statements%2030%20June%202025.
Fortress' summary consolidated financial statements for the year
ended 30 June 2025, which include directors' commentary, have
been published on Fortress' website at: https://fortressfund.co.za/
financials/view-pdf?id=Summary%20consolidated%20financial%20
statements%2030%20June%202025.
Copies of the FY2025 AFS, including the audit opinion, are available
for inspection during business hours at the registered offices of
Fortress or its sponsors, Java Capital and Nedbank Limited, acting
through its Corporate and Investment Banking Division and/or through
a secure electronic manner at the election of the person requesting
inspection. Such inspection will be at no charge and investors may
request a copy of Fortress' audited consolidated financial statements
for the year ended 30 June 2025 from tamlyn@fortressfund.co.za.
This results announcement itself is not audited or reviewed by
Fortress' auditor, but extracted from the FY2025 AFS and Fortress'
summary consolidated financial statements for FY2025.
By order of the board
Steven Brown Ian Vorster
Chief executive officer Chief financial officer
Johannesburg
4 September 2025
Block C, Cullinan Place, Cullinan Close, Morningside, 2196.
PO Box 138, Rivonia, 2128
Lead sponsor
Java Capital
Joint equity sponsor and debt sponsor
Nedbank CIB
Date: 04-09-2025 02:00:00
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