Fortress JSE listing: More details

Through its subsidiaries, Fortress owns a diversified portfolio of 103 retail, industrial and commercial properties, currently valued in excess of R2,2 billion. The portfolio has an effective Gross Lettable Area (GLA) of 524 243 m². This GLA comprises 39% retail, 54% industrial and 7% commercial, with 58% of the GLA in Gauteng.
Tenants include large national and listed businesses such as Shoprite Checkers, Edcon, Pick 'n Pay, Pepkor, Sasol, and major franchisees. The portfolio of properties was recently acquired from several vendors including the listed Resilient Property Income Fund, Pangbourne Properties and Capital Property Fund, all of which are shareholders in Fortress.

Mark Stevens, Fortress Managing Director, says the listing, which was preceded by a private placement, will provide working capital as well as a source of capital to fund growth. "It also provides the South African investor, both institutional and private, with the opportunity to participate directly in the income streams and future capital growth of Fortress. In the long term, it allows the group to obtain a wide spread of investors in Fortress, increasing the liquidity and tradability of the linked units."

Stevens says the listing will allow Fortress to fulfill its strategy, being the retention of its retail properties and the opportunistic selling of commercial and industrial properties to owner-occupiers. "Fortress is also pursuing the acquisition of long corporate leases, and looking to increase its exposure to listed securities and hard currencies through offshore investments."

Investors are offered two forms of participation in Fortress' rental income streams, with the choice of two classes of linked units, depending on the risk/reward needs of investors. The preferential "A" linked units are presently offering a forecast annualised forward yield to June 2010 of 10,75% and the "B" linked units of 9%.

In the "Real Estate Holdings and Development" sector of the JSE, Fortress will list 353 184 384 linked units (made up of 176 592 192 "A" linked units and 176 592 192 "B" linked units), under the abbreviated names "FortressA" (JSE code FFA) and "FortressB" (JSE code FFB).

The private placement to selected investors comprised 13 000 000 "A" linked units at R9 each and 13 000 000 "B" linked units at R1. The offer was fully subscribed.

Fortress asset management will be undertaken by its executive management and property management agreements have been concluded with JHI and Broll.

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