Wrap Text
Pre-close operational update
FORTRESS REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2009/016487/06)
JSE share codes: FFA ISIN: ZAE000248498
FFB ISIN: ZAE000248506
Bond company code: FORI
LEI: 378900FE98E30F24D975
(Approved as a REIT by the JSE)
(“Fortress”)
PRE-CLOSE OPERATIONAL UPDATE
Shareholders and noteholders are referred to the interim results announcement for the six-month period ended
31 December 2020, released on SENS on 10 March 2021. We hereby provide an update on Fortress’ operations.
Logistics and logistics developments
Shareholders and noteholders are referred to the SENS announcement published on 17 May 2021 wherein we
advised that Fortress has entered into a binding agreement to develop a new distribution centre for Pick n Pay
at our Eastport Logistics Park (“Eastport”). Salient details of the agreement were contained in that announcement
and development activities have commenced on the site.
We have let a building with a gross lettable area (“GLA”) of 20 232m2, scheduled for completion in July 2021,
to online retailer Takealot and we are furthermore in negotiations with a prospective tenant for a completed
building measuring 13 756m2 at Eastport. We have let an additional 14 257m2 of GLA at Clairwood Logistics
Park to Super Group on a five-year lease.
Retail
On a like-for-like basis for the nine-month period ended 31 March 2021, compared to the nine-month period
ended 31 March 2020, tenant turnover figures in our retail portfolio have increased by 0,9%.
Our retail portfolio, comprising of CBD, Rural, Suburban and Township centres, continues to show its
defensiveness in this challenging trading environment.
Vacancies
We present a summary of the vacancy per sector at 31 December 2020 and 31 May 2021 in the table below. The
vacancies are forecast to reduce once properties with high vacancies have transferred, most notably 409 West
Street and Oak Avenue Highveld. The vacancy in the core retail and logistics portfolios remains satisfactory.
Based Based
on GLA on GLA
Dec 2020 May 2021
Sector % %
Total (including CEE*) 6,8 9,0
Logistics – South Africa 4,3 4,5
Retail 5,3 5,3
Industrial 7,9 14,3
Office 26,8 34,5
Other^ 2,9 2,9
Logistics – CEE - 5,5
Information based on management accounts.
* Central and Eastern Europe.
^ Includes a hotel, residential units, motor dealerships and serviced apartment properties.
Direct property disposals
Our disposals programme of non-core properties has continued successfully. Total disposals for the financial
year-to-date are R1,51 billion in net proceeds against a book value at 30 June 2020 of R1,46 billion. The
following properties have transferred since 30 June 2020:
Book
Net value
proceeds Jun 2020 Transfer
Property name Sector R’000 R'000 date
Cornubia Ridge Logistics Park (49.9% share)# Logistics 454 289 416 326 Dec 2020
Louwlardia Logistics Park – Building 2 (WAG)
(50% undivided share) Logistics 154 500 154 500 Aug 2020*
Sunnyrock Close Germiston Industrial 91 130 91 130 Jun 2021
Protea Centre Retail 83 000 83 000 Sep 2020
Nongoma Shopping Centre Retail 80 200 70 000 Jun 2021
Eastport Logistics Park (65% share) – land Logistics land 71 175 58 693 Nov 2020**
portion only
38 Isando Road Isando^ Industrial 70 000 75 510 Mar 2021
Shoprite Port Shepstone Retail 67 320 68 000 Oct 2020
30 Bell Street Hennopspark^ Industrial 51 500 52 000 Mar 2021
Elliot Avenue Epping Industrial 45 000 45 000 Nov 2020
2 Drakensberg Drive Longmeadow Logistics 39 500 41 210 Dec 2020
Modderfontein Road Longmeadow Other - Motor
dealership 32 725 31 400 Dec 2020
204 Rivonia Road Morningside (Blocks C and Office 30 830 30 830 Aug and
E) Sep 2020**
Nywerheid and Evergreen^ Industrial 28 000 28 951 Apr 2021
189 Monte Carlo Crescent Kyalami Office 26 235 26 235 Sep 2020
Makhado Square Retail 25 750 31 000 Jun 2021
122 Koornhof Road Meadowdale^ Industrial 23 000 23 197 Jan 2021
Louis Trichardt Street Nelspruit Industrial 22 500 22 500 Sep 2020
8 and 16 Harry Street Industrial 22 000 23 740 Nov 2020
Brunton Circle Founders View South Logistics 18 000 19 680 Dec 2020
Lakeview Business Park (No. 9)^ Industrial 15 000 12 700 Apr 2021
Broad and Simmonds Streets Industrial 14 550 14 550 Jul 2020
4 Neutron Street Linbro Park^ Logistics 14 250 13 700 Apr 2021
Groblersdal Centre Retail 7 700 7 500 Nov 2020
Library Office Park^ Office 6 750 8 000 Feb 2021
Bart Street Wilbart Industrial 5 940 5 940 Nov 2020
Sharland Street Driehoek^ Industrial 5 700 7 620 Mar 2021
1 506 544 1 462 912
# Book value at transfer date, net of impairment.
* Effective date sale transaction was August 2020 with transfer in March 2021.
** Effective date transaction. Proceeds have been received. Not yet transferred.
^ Held for sale at 31 December 2020
The following properties are classified as held for sale:
Book
Net value
proceeds Jun-20
Property name Sector R'000 R'000 Transfer date
Oak Avenue Highveld Office 123 500 127 000 @
409 West Street Retail 83 000 82 500 @
Pelican Park Jet Park Industrial 60 021 59 380 @
266 521 268 880
@ Not yet transferred.
Billings and collections
Since January 2021 we have collected 99,8% of total billings.
Funding, liquidity and treasury
At 31 May 2021, Fortress had a total of R3,0 billion of cash and available facilities and remains comfortably
within all debt covenants.
Fortress’ loan-to-value ratio at 31 May 2021 was approximately 37,9%.
Outlook
Shareholders and noteholders are referred to the SENS announcement published on 21 May 2021 whereby
dividend guidance per Fortress A and per Fortress B share was withdrawn in respect of the six-month period
ending 30 June 2021.
18 June 2021
Lead sponsor Joint sponsor Debt sponsor
Java Capital Nedbank Corporate and Investment Banking Rand Merchant Bank
(a division of Nedbank Limited) (a division of First Rand Bank Limited)
Date: 18-06-2021 10:55:00
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