Strong fundamentals continue to power growth for Fortress Real Estate Investments

It’s been, in Steven Brown’s words, “a very strong set of results” for Fortress this year.

For the year ended 30 June 2026, distributable earnings rose 14.2% to R2.234 billion, ahead of the company’s guidance – a result achieved despite rising energy prices, higher interest rates, and a challenging macroeconomic backdrop.

“What’s been most pleasing to see is the buoyancy in the South African real estate market,” Brown says in the video.

“It’s really been quite something to see, especially given that the macro growth has been quite weak.”

That buoyancy showed up clearly across Fortress’s core portfolios: the South African logistics portfolio – now almost R20 billion in value, having doubled in size over the past six years – continues to hold very low vacancies, and the core South African retail portfolio remains low too.

On a like-for-like basis, the South African logistics portfolio delivered net operating income (NOI) growth of 8.4%, with retail close behind at 7.3%.

Group-wide, like-for-like NOI growth came in at 6.8%, with net asset value (NAV) also climbing – SA Reit NAV per share rose 9.2% and tangible NAV per share rose 9.4%.

“That NOI growth has also lifted valuations, which is one of the key underpinnings of a stronger balance sheet at 30 June,” says Ian Vorster, Fortress’s CFO.

That stronger balance sheet was aided by a R1.35 billion equity raise, completed in an accelerated bookbuild late in the financial year.

“It’s been something we haven’t been able to do in just over a decade,” Brown says of returning to shareholders for fresh capital. “So again, thanks to all our shareholders for their support and for entrusting us with that money.”

The capital raise, together with continued earnings growth, brought Fortress’s loan-to-value ratio down from 39.1% to 34% – on the lower end of the company’s targeted range.

Fortress taps debt markets

Vorster also points to unusually favourable conditions in the debt capital markets: “We’ve seen unprecedented tightening of pricing … Fortress was able to raise R2.7 billion in tenors of three, five and seven years at really compelling pricing,” he says – including South Africa’s first Zaronia-linked note issued by a listed property company.

That capital is being put to work in the logistics pipeline. “We have some very exciting pipeline projects,” Brown says.

Since 2019, Fortress has developed between 100 000m² and 150 000m² of logistics space a year, largely funded – in what has been a capital-constrained market – by selling older, non-core assets.

“We’ve managed to more than double our logistics portfolio just by selling older assets,” says Brown.

Looking ahead, the company’s South African logistics pipeline stands at approximately 286 000m² of undeveloped gross lettable area (GLA), including the newly acquired Eastport North site – reducing to around 170 000m² once pre-let deals there are concluded.

Brown says growing demand around nodes like the Western Cape and an increasingly efficient Durban port give Fortress “the confidence to grow that portfolio of pipeline projects, and we will do so in a very disciplined, capital-light manner”.

Fortress CFO Ian Vorster. Image: Supplied

On the retail side, the standout move of the year was the acquisition of a controlling stake in Balfour Mall – “probably a bit of an institution” for Johannesburg residents, Brown says, “but I think it perhaps lost its way a little”.

Fortress’s retail team is now applying its in-house development, asset management and leasing expertise to change the asset’s trajectory, part of a broader shift toward redeveloping underperforming retail assets rather than building new ones.

Advancing sustainability

Sustainability featured prominently too.

At 30 June 2026, Fortress had 121 operational solar PV plants (with 133 planned by June 2027) and an installed capacity of 40.11MWac, alongside 1.95MWh of battery storage capacity – set to more than triple to 7.05MWh once approved installations are commissioned.

“What that gives us, looking forward, is a much more sustainable portfolio,” Brown says, “and ultimately the financial benefit is a lower occupancy cost for our tenants … and happier tenants, which is certainly one of the key things we seek at Fortress.”

Shareholders felt the benefit directly

The board declared a 2H2026 dividend of 90.91 cents per share, taking the full-year distribution to 178.8 cents – up 10.1% on the year before.

Vorster notes that shareholders who held a Fortress share across the year also saw a share price uptick of roughly 21% and a yield of around 9%, with those who took the scrip dividend alternative benefitting further.

Forward guidance for FY2027 has been revised upward to 192 cents, a 7.5% increase in distribution per share.

“It’s a team effort,” Brown says, closing out the video, “and everybody has really pulled together to deliver a fantastic set of results. So thank you.”

Brought to you by Fortress Real Estate Investments. 

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