Fortress Reit, the JSE-listed real estate investment trust (Reit) which invests in logistics and commuter retail believes its Eastport Logistics Park, will cement its position as the premium logistics landlord in South Africa.
The Reit which has a combined market capitalisation of R18bn across its A and B type shares, says Eastport, located in the east of Gauteng, is primed to be a location of choice for industrial and fast-moving consumer goods businesses across SA.
The logistics park will be worth a whopping R5bn on completion and will stand out as a special facility, sitting at north east of the intersection between the R21 and the R25 roads. It will include 500 000 m2 of prime logistics space, close to the ORT airport in Gauteng.
CEO Steven Brown says Fortress has a dedicated plan to be the logistics landlord of choice and that management had been accelerating his expansion since he took the helm in 2019. Brown was formerly CFO of the JSE-listed fund, working under former CEO Mark Stevens.
“Eastport is a key asset for Fortress. It is an example of what we can achieve as a fund with a clear strategy and a skilled management team. The proof is in the pudding; hence the quality of tenants who have signed long term leases to give themselves the opportunity to excel at Eastport,” says Brown.
He says a huge vote of confidence in Eastport is that one of SA’s largest food retailers, Pick ‘n Pay, has chosen to relocate its top-end distribution centre in Longmeadow to the park in May 2023.
The new R2.2bn centre of which Pick ‘n Pay will be the anchor tenant, will have more than 165 000 m2 of gross lettable space, making it the largest distribution centre on the continent.
Fortress will ultimately own 40% of the development, with Pick ‘n Pay acquiring 60% of the new inland distribution site once the sub-division has been approved and the transfer completed. Fortress will fund the incremental capital required for the development from existing available facilities.
The distribution Centre will cover 36 hectares of state-of-the art infrastructure. It will be situated in the North-Eastern part of the park with its own access off the R21 Expressway. Pick n Pay’s lease is 15 years long and has an attached option of renewal.
The distribution centre will house groceries in an ambient environment of approximately 94000m2 and cold storage of approximately 46000m2. The remainder of the space will comprise returns, offices, gatehouse and aerosol storage.
Pieter Boon, the CEO of Pick ‘n Pay, meanwhile says that the new inland distribution centre “is a key investment in their competitive advantage.”
He adds that “the facility will help Pick n Pay deliver key logistics and supply chain innovations, achieving efficiencies and growing market share at a time when faster and cheaper service of our stores has never been more important to deliver on our customer promise of low prices and reliable service.”
Jason Cooper, head of development at Fortress Logistics, a division of Fortress Reit, says there will ultimately be seven buildings at the park. Five buildings have been completed so far, with the distribution facility for Pick n Pay being the sixth building. A speculative seventh building will later be developed. Cooper says the Eastport Logistics Park is expected to be completed in the next few years depending on demand and market conditions. In fact, he says that at the current rate of development, it will be completed at the end of 2024 and will be the same size as 36 rugby fields.
Cooper says the park stands out because of its size and its mix of logistics and storage facilities with bespoke features. Also, Macsteel, a client of Fortress is trying to break the current world record as per Guinness World Records for the ‘longest roof span covered by a single metal corrugated sheet’.