Fortress holds back on dividend for the six months to December
Effects of the pandemic on its liquidity have put the Reit in a tight spot
Fortress Real Estate Investment Trust (Reit), which owns high-end logistics assets and commuter retail centres, has decided not to declare a dividend for the six months to December, owing to the effects of the pandemic on its liquidity.
Fortress CEO Steve Brown said in a statement that despite challenging times, the trust remained focused on continuing rolling out the largest development pipeline of logistics real estate in SA, which sits at about 1-million square metres, and ensuring that its defensively positioned convenience and commuter-orientated retail real estate assets continue to perform.
The group which has a combined market capitalisation of R19.3bn across its A and B shares, released its six months financial results to December on Wednesday. Total revenue including revenue from investments declined 15.9% to R1.6bn.
The company, which owns R28.4bn in assets placing it among the top 10 listed Reits) on the JSE by asset value, has a loan-to-value (LTV) ratio of 38.1%.
LTV measures the value of a company’s debt relative to its assets. Fund managers prefer LTVs to be between 35% and 40%, as a ratio higher than that could imply financial distress.
The company said that in the six months to December, it managed to complete, let and secure tenants for about 340,000m² of its 1-million square metre gross lettable area logistics development pipeline in SA.
It sold R1.1bn of properties at above book value, acquired two logistics parks in Poland, as it invested in Eastern Europe for the first time and reduced its overall vacancies from 8.9% to 6.8%.
The company said forecasting in the current market conditions remains challenging due to the uncertainty over lockdown restrictions and the changing financial position of tenants both in SA and in central and Eastern Europe.
Fortress’s share price gained 3.94% to close at R2.90, giving the company a market capitalisation of R3.1bn.
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