Fortress REIT launches US$61.3m sustainability-linked bonds on JSE to scale-up

SOUTH AFRICA – Hybrid fund Fortress Reit said it had launched sustainability-linked bonds of R900 (US$61.3 million) million aligned to its ongoing strategic environmental, social and governance plan to scale up its renewable energy outputs and deliver more solar energy to the national grid.

The Johannesburg Stock Exchange had granted Fortress the listing of a three-year sustainability-linked bond of R495 million (US$33.7 million) and a five-year sustainability-linked note of R405 million (US$27.6 million).

It said. “Although the bonds do not have specific use-of-proceed requirements, the funds will assist Fortress with the continued installation and increase of solar energy in South Africa, across its retail and logistics portfolios. This will allow Fortress’ real estate assets to meet its targets for solar energy, facilitate a reduction in reliance on utilities, reduce its carbon footprint and contribute to mitigating climate change,”

Ian Vorster, the chief financial officer of Fortress Reit, said the target measurement dates for the five-year note were June 30, 2022, and June 30, 2024.

The renewable energy target would be achieved through an increase in solar energy installed measured in megawatt-peak (MWp) with respect to the South African portion of its portfolio. The target was for a 2.2MWp increase at the first target date in June 2022 and a further 3.6MWp in June 2024, resulting in a cumulative 5.8MWp installation.

This would be added to Fortress’s current solar energy program, which generated 4.735MWp from 10 installations.

“The funds will assist Fortress with the continued installation and increase of solar energy in South Africa, across its retail and logistics portfolios”

Steven Brown, the chief executive of Fortress Reit, said: “There is a massive demand for renewable energy from our tenants. This is primarily driven by their desire to play their part in mitigating greenhouse gas emissions and contributing to a more sustainable future.”

In May 2021, Pick n Pay and Fortress co-invested in a distribution center development.

Fortress REIT announced that it had signed its biggest logistic developer with grocery retailer Pick n Pay. The deal was signed at Reit’s flagship premium-grade Eastport Logistics Park in Gauteng.

Fortress said it would ultimately own 40% of the development, with Pick n Pay acquiring 60% of the new inland distribution site once the subdivision was approved and the transfer completed.

Fortress is South Africa’s largest owner and developer of premium-grade logistics parks.

It has a sizeable portfolio of convenience and computer-oriented retail, and it is also the largest shareholder in NEPI Rockcastle, which is active in high-growth retail in Central and Eastern Europe.

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