Fortress Real Estate Investments has published its financial results for the year ended 30^th June 2025, reporting a total shareholder return of more than 30% for the period.

Shifting to a real estate investment company (REIC) has unlocked various benefits, including specific tax deductions in relation to development allowances that are otherwise not claimable as a REIT, it says.

“Over the period, investors have returned to the direct real estate market, providing an underpin to our direct property valuations which have increased by 6.5% from FY2024 on a like-for-like basis,” says Steven Brown, CEO at Fortress Real Estate Investments.

“We have also seen encouraging investor returns in the listed real estate market, with our shares currently trading at a 10% discount to net asset value (NAV), from over 20% at the start of the financial year.”

The Company owns a portfolio of logistics assets in South Africa and Central Eastern Europe (CEE) valued at R22.7 billion and a portfolio of retail assets of R11.8 billion in South Africa. In addition, its currently holds approximately R15.8 billion in NEPI Rockcastle shares.

Fortress reported a low overall vacancy rate of 3.4% across its portfolio with its logistics assets’ vacancies at a record low of 0.4% while its retail portfolio delivered strong like-for-like net operating income (NOI) growth of 9.4%, which is materially above the inflation rate of 3% for the year.

“This portfolio contributed 35% to our total NOI and remains a significant driver of our growth. Our focus in commuter and convivence shopping centres are trading well and have growth potential into the future, combined with disposing of underperforming centres and investing in our current malls, has contributed to the outperformance,” says Brown.

“Our development team again contributed meaningfully to our performance and reached a milestone, with our in-house teams in South Africa and Poland developing 70% of our current logistics properties. We have a remaining 210 000m² of gross lettable area (GLA) to develop over the next four years with most of that being in the Central Eastern European region.”

Fortress’ total distribution for FY2025 of R1,956 billion reflected an increase of 9.4% on the prior year, resulting in a final dividend of 86.29 cents per share for H2 2025 in addition to the H1 2025 interim after-tax cash dividend of 76.15 cents per share paid in April 2025. Its total distribution for FY2025 amounted to 162.44 cents per share with a total shareholder return of more than 30% for the financial year.

To provide more options for its shareholder base, Fortress says it continues to allow shareholders to receive the final dividend in cash or as a scrip dividend in the form of NEPI Rockcastle shares at a ratio of 0,678 for every 100 Fortress B shares held.

The Company forecasts growth of between 6% and 7.5% in distributable earnings per share for FY2026 with its loan-to-value (LTV) ratio currently sitting at 39.1% (FY2024: 38.2%).