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Consolidated audited financial results for the year ended 30 June 2026 and prospects
Fortress Real Estate Investments Limited
Incorporated in the Republic of South Africa
Registration number: 2009/016487/06
JSE share code: FFB
ISIN: ZAE000248506
LEI: 378900FE98E30F24D975
Bond company code: FORI
("Fortress" or "the group" or "the company")
Consolidated audited financial results for the year ended 30 June 2026 and prospects
"Fortress is a real estate investment company with a portfolio of high-quality logistics and retail assets. We own a portfolio of logistics properties
in South Africa and Central and Eastern Europe valued at R25,5 billion and a portfolio of direct retail properties of R12,9 billion, all located in
South Africa. We also have an in-house development team focused on rolling out our logistics pipeline in South Africa and Central and Eastern Europe,
which is currently in excess of R4,6 billion. In addition, we currently hold approximately R15,3 billion in NEPI Rockcastle shares, which provides
exposure to a market-leading retail property portfolio in Central and Eastern Europe. Combined, these direct and indirect holdings provide shareholders,
through a listed and liquid Fortress share, with exposure to a portfolio of real estate assets in excess of R56 billion and paying semi-annual,
after-tax dividends.
The geopolitical events of 2026 precipitated a rise in global energy prices and interest rates. However, overall capital markets have positively
positioned towards real estate, driven largely by strong fundamentals, which are leading to better-than-expected growth. This positive sentiment in
the capital markets allowed us to raise additional equity of R1,35 billion, which provides us with an appropriate mix of capital to fund our development
pipeline, without the need to dispose of assets in an improving direct real estate market.
We have seen 6,4% like-for-like growth in our South African portfolio values and continued upward momentum in the direct market. The valuation uplift is
the result of the better quality of our portfolio, following the redeployment of capital from the disposal of older assets into developments, expansions
and acquisitions. Since 2019, we have disposed of assets with a total value of R11,6 billion and developed and acquired assets at an approximate cost of
R17,5 billion. The NOI growth, on a like-for-like basis, of 7,3% and 8,4% in our core South African retail and South African logistics portfolios,
respectively, is testament to the high-quality portfolio we now own, resulting from the execution of our recycling strategy and focus on assets with
better future earnings growth. For FY2026, our portfolio outperformed our expectations at the start of the year, with overall like-for-like NOI growth
of 6,8%.
The strong first-half performance of FY2026 continued into the second half and our full-year distributable earnings were ahead of the R2 150 million
guidance. Distributable earnings for FY2026 amounted to R2 234,4 million, which represents growth of 14,2% compared to FY2025. The final dividend for
2H2026 amounts to 90,91 cents per share, which is 5,4% higher than the dividend for 2H2025. The total dividend per share for FY2026 amounted to
178,80 cents per share, 10,1% higher than the FY2025 dividend per share. Shareholders are provided with an option to elect a scrip dividend, settled
in additional FFB shares, as an alternative to the cash dividend, at a price of R24,00 per share (the scrip offer). The scrip offer price was determined
with reference to a long-dated VWAP and consideration of the current net asset value (adjusted for the final dividend of 90,91 cents per share), less
an appropriate discount. Further details will be communicated in due course."
Steven Brown, CEO
Nature of the business
Fortress is a real estate investment company with a focus on developing and letting premium-grade logistics real estate in South Africa and Central
and Eastern Europe (CEE), as well as growing our convenience and commuter-oriented retail portfolio. Fortress owns a direct property portfolio valued
at R40,9 billion, which includes R25,5 billion of logistics real estate and R12,9 billion of retail real estate. Fortress holds, at the date of this
report, a 14,4% interest in NEPI Rockcastle N.V. (NEPI Rockcastle), the largest listed property company on the JSE Limited (JSE), with our interest
currently valued at R15,3 billion.
Distributable earnings
Distributable earnings amounted to R2 234,4 million for FY2026, compared to R1 956,2 million for FY2025, representing an increase of 14,2%. The board
has declared the full distributable earnings available for 2H2026 of R1 163,6 million as a dividend, which amounts to 90,91 cents per FFB share.
Shareholders may further elect to receive the 2H2026 distribution in cash, as the default option, or in the form of additional FFB shares. The shares
will be issued at a price of R24,00. Salient details of the scrip offer will be included in a circular to shareholders, to be released in due course.
Summary of financial performance
Jun 2026 Jun 2025 % change
Distributable earnings (R'000) 2 234 352& 1 956 238 14,2
Interim dividend declared per share - FFB (cents) 87,89 76,15 15,4
Final dividend declared per share - FFB (cents) 90,91 86,29 5,4
& Includes the FFB accelerated bookbuild undertaken on 29 June 2026. The 55 670 104 new shares were issued after year-end on 3 July 2026. The
distributable earnings for 2H2026 and for the full year FY2026 include an antecedent adjustment of R50,5 million relating to this issuance of shares.
All per share metrics for June 2026 include the shares in issue following this bookbuild.
IFRS Accounting Standards (IFRS) Information
Jun 2026 Jun 2025 % change
Revenue from direct property operations (R'000) 5 072 095 4 816 203 5,3
Total revenue (including revenue from investment)$ (R'000) 6 240 974 6 015 606 3,7
Net asset value (NAV) (R'000) 34 584 322 30 430 774 13,6
NAV per share^ (Rand) 27,02 25,27 6,9
Basic earnings per share - FFB (cents) 417,04 222,87 87,1
Headline earnings per share - FFB (cents) 263,74 36,00 632,6
$ Total revenue (including revenue from investment) includes dividends received from Fortress' investment in NEPI Rockcastle.
^ The NAV per share is calculated as the total NAV divided by the FFB shares in issue.
SA REIT Best Practice Disclosure
Jun 2026 Jun 2025 % change
NAV per share (Rand) 27,46 25,15 9,2
Loan-to-value (LTV) ratio (%) 34,0 39,1 #
Funds from operations (R'000) 2 179 385 1 934 926 12,6
# Percentage change not meaningful to disclose or not applicable.
Prospects
We have revised our FY2027 distributable earnings guidance upward to R2 460 million from the R2 310 million guidance published on 10 June 2026. This
represents a 10,1% increase on our reported distributable earnings of R2 234,4 million for FY2026. On a per share basis, the revised guidance
translates to a forecast distribution of approximately R1,92 per share, a 7,5% increase over the FY2026 distribution per share.
This forecast is based on the following assumptions:
Assumptions that the directors can influence
- Our distributable earnings methodology will remain consistent with that of prior periods, as previously communicated;
- No material sales, or acquisitions, outside of our planned pipeline occur which necessitate a revision to this forecast; and
- Contractual escalations and market-related renewals will be achieved with no major change in vacancy rates.
Assumptions that are outside the influence of the directors
- NEPI Rockcastle maintains a 90% payout ratio and meets its published distributable earnings per share guidance for its financial year ending
31 December 2026;
- There is no unforeseen failure of material tenants in our portfolio;
- Tenants will be able to absorb the recovery of rising utility costs and municipal rates;
- There is no unforeseen material macroeconomic deterioration in the markets in which Fortress has exposure;
- There are no unforeseen adverse sociopolitical and geopolitical events in the jurisdictions in which Fortress has exposure;
- There are no changes to current tax legislation in the jurisdictions in which the company operates; and
- There are no changes to current interest rates by the European Central Bank or the South African Reserve Bank.
The FY2027 distributable earnings guidance has been prepared in accordance with the company's accounting policies and in compliance with
IFRS Accounting Standards. The forecast has not been reviewed or reported on by Fortress' external auditor and is the responsibility of the board
of directors.
Financial periods defined as follows:
- 2H2025 - Final reporting period for the six months ended 30 June 2025;
- 2H2026 - Final reporting period for the six months ended 30 June 2026;
- FY2025 - Financial year ended 30 June 2025;
- FY2026 - Financial year ended 30 June 2026; and
- FY2027 - Financial year ending 30 June 2027.
This results announcement is the responsibility of Fortress' board of directors, is only a summary of the audited consolidated financial statements
for the year ended 30 June 2026 (FY2026 AFS) and does not contain full or complete details. Any investment decision by investors and/or shareholders
should be based on the FY2026 AFS. The auditor, KPMG Inc., has issued an unmodified audit opinion on the FY2026 AFS and notes the valuation of
investment properties as a key audit matter. The FY2026 AFS, including the audit report, have been released on SENS and are available on the JSE
cloudlink at:
https://senspdf.jse.co.za/documents/2026/jse/isse/FFBE/FY2026.pdf
and the company's website at:
https://fortressfund.co.za/financials/view-pdf?id=Annual%20financial%20statements%2030%20June%202026.
Fortress' summary consolidated financial statements for the year ended 30 June 2026, which include directors' commentary, have been published on
Fortress' website at:
https://fortressfund.co.za/financials/view-pdf?id=Summary%20consolidated%20financial%20statements%2030%20June%202026.
Copies of the FY2026 AFS, including the audit opinion, are available for inspection during business hours at the registered offices of Fortress or
its sponsors, Java Capital and Nedbank Limited, acting through its Corporate and Investment Banking Division and/or through a secure electronic
manner at the election of the person requesting inspection. Such inspection will be at no charge and investors may request a copy of the FY2026 AFS
from tamlyn@fortressfund.co.za.
This results announcement itself is not audited or reviewed by Fortress' auditor, but extracted from the FY2026 AFS and Fortress' summary consolidated
financial statements for FY2026.
By order of the board
Steven Brown Ian Vorster Johannesburg
Chief executive officer Chief financial officer 3 September 2026
Block C, Cullinan Place, Cullinan Close, Morningside, 2196. PO Box 138, Rivonia, 2128
Lead sponsor
Java Capital
Joint equity and debt sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 03/09/2026 01:20:00
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