Fortress Income Fund posts 14.36% rise in distributions

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Fortress Income Fund MD, Mark Stevens attributed the better-than-expected performance to a combination of strong growth in turnover rentals from the fund’s South African property portfolio. Fortress Income Fund MD, Mark Stevens attributed the better-than-expected performance to a combination of strong growth in turnover rentals from the fund’s South African property portfolio.

Fortress Income Fund, which invest in retail properties‚ in particular centres close to transport nodes, on Tuesday reported a 14.36% rise in its distributions to unitholders in the year to June from a year ago.

The distribution attributable to the A-linked units was 117.62c (a 5% increase) with 43.28c attributable to the B-linked units‚ a 50.9% increase.

The direct properties generally performed ahead of budget and R5.2m of unbudgeted turnover rental was received in 2014.

Fortress MD Mark Stevens on Tuesday attributed the better-than-expected performance to a combination of strong growth in turnover rentals from the fund’s South African property portfolio, the continued disposal of noncore industrial buildings and the depreciation of the rand, which boosted income from Rockcastle Global Real Estate Company and Romanian-focused New Europe Property Investments.

Fortress’s interest in the two offshore-focused sister funds increased to 34% of total assets. Mr Stevens said Fortress would increase its exposure to offshore real estate “where the opportunity arises”.

He added: “We like to think of ourselves as value players so we will continue to be opportunistic in our growth strategy.”

The focus will remain on retail properties close to transport nodes with high footfalls, said Mr Stevens. As such, the company will continue to offload its industrial properties as well as the remaining 0.5% exposure to offices. Fortress is expected to achieve 12% in overall growth in distributions in 2015.

Barclays Africa Group Wealth and Investment Management property fund manager Fayyaz Mottiar on Tuesday described Fortress’s results as “spectacular”. He liked the fact that Fortress continued to dispose of its industrial and office buildings, and also its clear focus on shopping centres in high-growth commuter areas.

Mr Mottiar said management needed to be commended for its conservative debt funding approach, with the cost of funding being fixed at an attractive 8.41% for five years.

Europe Property Investments plc and Rockcastle Global Real Estate Company experienced good growth in distributions in their respective currencies‚ and Fortress further benefited from the depreciation of the rand.

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Listed Property / REITs  |  Fortress Income Fund  |  Real Estate Investment Trusts (REITs)  |  Mark Stevens
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