FORTRESS IN­COME FUND

Finweek English Edition - - COVER STORY -

KEY IN­DI­CA­TORS: R55.37bn ±R62bn Pri­mar­ily in­dus­trial/lo­gis­tics and re­tail and to a lesser de­gree of­fice SA, and non-phys­i­cal broad in­ter­na­tional ex­po­sure through its in­ter­ests in listed coun­ters Green­bay, Nepi, Re­silient, Ham­mer­son and Rock­cas­tle 25.2% 93.5% (av­er­age term 4.1 years) A-class: 7.6%; B-class: 4.49% A-class: 1 buy, 1 sell, 1 hold; 2 sell, 1 buy (com­piled by IRESS) An­other Top40 com­pany, Fortress is a hy­brid REIT op­er­at­ing an A and B dual-share sys­tem. It in­vests in both phys­i­cal and listed prop­erty se­cu­ri­ties, R30bn-odd of its R62bn as­sets com­ing from phys­i­cal as­sets in SA, the bal­ance in listed prop­erty stocks abroad.

Even while Fortress’s off­shore ex­po­sure is around 50% through its in­vest­ment in off­shore stocks, fur­ther off­shore ex­po­sure could be on the cards.

Not­with­stand­ing that large chunk of off­shore ex­po­sure, Fortress CEO Mark Stevens says the com­pany is still very com­mit­ted to SA. “We have a devel­op­ment pipe­line of about R7.5bn, which we ex­pect to in­vest over the next three years.

“Growth will pick up at some stage. Maybe not in the next year or so, but it is still a good place to do busi­ness. There are still lots of op­por­tu­ni­ties in SA.”

And if Fortress is un­able to find qual­ity as­sets, they will build them, says Stevens. That won’t nec­es­sar­ily be re­tail that Stevens says is over-shopped in a lot of nodes. But, he says, the com­pany is firmly com­mit­ted to the lo­gis­tics side of the mar­ket. “That’s where we think there are big op­por­tu­ni­ties.”

Fortress pre­vi­ously fore­cast a 25% in­crease in dis­tri­bu­tion on its B-shares for the 2017 fi­nan­cial year, and Stevens says that fore­cast is still in place.

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