Fortress Real Estate Investments : Interim results presentation 31 December 2023

Powering Growth

Results Presentation

For the interim period ended 31 December 2023

Steven Brown

CEO

. .

Overview

Highlights

Simplified capital structure

Overwhelming approval by

our shareholders to

simplify our capital structure

Strong development pipeline

677 000m²

of which

135 609m²

is under development (SA & CEE)

LTV

Spot 39,4%

31 December 2023 34,2%

Logistics portfolio value

R19,2bn

(like-for-like NOI growth of +9,8%)

new logistics developments completed

71 000m²

Solar PV rollout

50 solar plants

18.15MWac current installed capacity

(December 2022: 8.46MWac) (December 2023: 15.29MWac)

Non-core asset disposals

15 properties sold for R1,14bn at 23%

premium to book value

Retail portfolio value

R10,4bn

+6,9% YoY turnover growth vacancy rate of 1,6% (rental)

Largest direct portfolio since listing

R34bn

Sustained low overall vacancy (rental)

3,7%

(June 2023: 3,3%)

Resumption of dividends

81,44cps

(revised full year FY2024 guidance of

142cps to 147cps)

3

Overview
Overall
vacancies
40%
35%																					28,6%
30%																			23,6%	28,1%		25,3%
25%																			22,9%
20%
15%
																							24,4%
10%	8,9%	7,4%	5,4%	3,7%	4,2%							8,3%		6,5%	6,0%								17,6%	13,0%	8,2%	7,4%	8,1%			4,1%4,1%
5%	3,0%	3,8%	1,2%	0,5%	1,2%	1,5%	3,8%	3,7%	3,6%	2,3%	2,0%				2,3%	2,7%	0,8%
						8,4%	0,0%
			6,5%
	3,3% 3,7%
0%										1,1%									1,6%
	Total Portfolio		Logistics - SA	Logistics - CEE			Retail				Office			Industrial				Other
		(GLA)				(GLA)			(GLA)			(GLA)			(GLA)			(GLA)					(GLA)
		Vacancy by rental					FY2020		FY2021		FY2022		FY2023	1H2024

Fortress Real Estate Investments	4
Interim results 2024

Overview

31 December 2023 asset base

R4,5bn pipeline

R19bn assets

Non-coreOther* | R0,2bn

SA Office and Land | R1,5bn

SA Industrial | R2,5bn

CEE Logistics

Development | R1,2bn

CEE Logistics | R2,2bn

SA Logistics

Development | R2,0bn

SA Retail | R10,4bn

D e

R30bn assets

b t

Developments (Rbn)

8,6

Asset disposals (Rbn)

|

7,9

7,7	T
N

Real estate

R

2

7,1

0,8

1,7

0,9

3,3

1,6

3,9

0,6

5,2

1,3

6,4

1,1

			A
			V
		|
			R
		3
		7
			b
			n
	2,5

assets R54bn

0 b n

1,1

1,8

0,7

2,9

1,1

4,6

1,7

2,4

0,9

1,5

2019	2020	2021	2022	2023	1H2024	2024	SA Logistics |
		Cumulative sales			Annual sales	(target)

R13,8bn

2019	2020	2021	2022	2023	1H2024	2024
									(est.)
		Cumulative developments		Annual developments

NEPI Rockcastle | R20,2bn ^

* Comprises residential units and serviced apartments | Information based on effective economic interest	Fortress Real Estate Investments
^ Based on closing price per share (R126,38) and shareholding (160 135 676 shares) at 31 December 2023	5
Interim results 2024

Overview

Target asset base

R20bn - R25bn

assets

CEE Logistics | R5,5bn

SA Logistics | R16bn

TARGET ASSET BASE

SA Retail | R10,1bn

		L
		T
		V
		t
		a
T		r
	g
N
	e
A		t
Total	3
V
		|
|	assets	5
R	%
R40bn - R50bn
5
2		-
		4
b		0
n		%
-
R
3
5
b
n

NEPI Rockcastle | R14,3bn*

R20bn - R25bn

assets

For existing assets, FY2023 values were used

* Based on the current shareholding in NEPI (107 001 304 shares) and closing share price of R133,85 per share as at 7 March 2024

Fortress Real Estate Investments	6
Interim results 2024

Overview

Strategic focus

DEVELOPMENT PIPELINE

Logistics

• Proceeds from disposals will be used to fund development pipeline and extensions/enhancements of existing assets
• Focus on pre-lets where parks are well-established
• Proven development business
  Retail
• Expand and enhance our best assets

ASSET RECYCLING

• Maintain discipline with respect to non- core asset disposals
• Attractive portfolio disposal opportunities are limited
• Single-assettransactions continue to meet targets (quantum and price to book value)
• Disposal proceeds of R1,14bn achieved for financial year to date at a 23% premium to book (1H2024: R1,02bn)
• Acceleration of office portfolio disposal

OPPORTUNITIES

• Capital constraints and high interest rates will create opportunities in our core markets
• Single-sharecapital structure allows for flexibility, access to equity markets and value-unlock opportunities
• Healthy demand for new logistics and well-positioned retail in SA
• Strong fundamentals in CEE markets in which we are invested (c.40% of assets)

Eastport Logistics Park		Clairwood Logistics Park		Bydgoszcz Logistics Park

Fortress Real Estate Investments	7
Interim results 2024

Overview

Property disposals

for the financial year to date

Financial year-to-date

	Office	Logistics	Industrial	Retail	Land
R1,14bn					(Logistics)
R203m	R727m	R175m	R29m	R6m
(15 assets at 23%	(3% premium	(35% premium	(8% premium	(at book)	(55% premium
premium to book)	to book)	to book)	to book)		to book)
(4,6% excluding
Longmeadow)
31 December 2023
	Office	Logistics	Industrial	Retail	Land
R1,02bn					(Logistics)
R92m	R714m	R175m	R29m	R6m
(13 assets at 25%	(at book)	(36% premium	(8% premium	(at book)	(55% premium
premium to book)
	to book)	to book)		to book)

(4,4% excluding Longmeadow)

8	Fortress Real Estate Investments
Interim results 2024	Longmeadow

Overview

Asset recycling

disposing non-core, deploying into growth

Asset disposals (R'bn)

Target

0,8

1,7

0,9

3,3

1,6

3,9

0,6

5,2

1,3

6,2

1,1

7,7

2,5

5

4

3

5-year estimate

Other R0,2bn

SA Office

R1,5bn

2019	2020	2021	2022	2023	1H2024	2024 (target)
	Cumulative sales			Annual sales

billion

1,1

1,8

Developments (R'bn)

7,1

4,6

2,9

8,0

8,6

R

2

1

0

SA Industrial

R2,5bn

Cash redeployed

R4,5bn

0,7

1,1	1,7	2,4

0,9

1,5

Disposal proceeds *

Pipeline (SA and CEE)

2019	2020	2021	2022	2023	1H2024	2024 (est.)
	Cumulative developments			Annual developments

*Comprises non-core assets

Fortress Real Estate Investments	9
Interim results 2024

S U S T A I N A B I L I T Y