CAPE TOWN - FORTRESS real estate investment trust (Reit) has acquired two logistics parks in Poland that were well located to supply high-growth Western European economies and which deepened the investment proposition of the group, chief executive Steven Brown said yesterday.
Fortress is South Africa’s largest owner and developer of premium-grade logistics parks. It has a sizeable portfolio of convenience and commuter-oriented retail, and it is also the largest shareholder in NEPI Rockcastle, which is active in high-growth retail in Central and Eastern Europe.
Brown said yesterday Central and Eastern Europe was often referred to as “the new Silk Road as Asian and Western European suppliers and manufacturers capitalise on the regions highly skilled but lower-cost human capital”.
Central and Eastern Europe’s geographic proximity and infrastructure-rich access to high-value Western European economies deepened the investment case for logistics real estate in the region, he said.
The first two acquisitions in Poland were Waimea Group’s two logistics parks in Bydgoszcz and Stargard, which were situated in regional industrial zones benefiting from strong infrastructure.
Waimea’s 48 300 square metre logistics park at Bydgoszcz could be expanded to 91 000 square metres. Waimea’s logistics park at Stargard included a hall of 11 500 square metres with the potential to expand to about 80 000 square metres.
“Retail competition in the advanced economies of Western Europe is increasingly determined by the ability to support e-commerce via omnichannel, so growth in the logistics real estate sector in Central and Eastern Europe is set to sustain for decades to come. A strong and able logistics presence in the region is, today, a key determinant of competitiveness - and investment - for any global real estate business,” said Brown.
In the six months to December 31, 2020, Fortress did not declare a dividend, and, based on Fortress receiving capitalisation shares in lieu of cash dividends from Nepi Rockcastle in the first six month period, Fortress was confident of retaining its Reit status for the full financial year to June 30. Reits have to pay out at least 75 percent of distributable income.
The group had cash and facilities of R2.8 billion at the end of the six-month period. Loan to value, based on management accounts, was 38.1 percent.
Looking ahead, Brown said signature client developments in key South African and European logistics developments “present a powerful long-term investment proposition as Fortress continues to roll out its pipeline of one million square metres of logistics gross letting area”.
BUSINESS REPORT