Retail strategy benefits Fortress

Posted On Thursday, 18 August 2011 02:00 Published by eProp Commercial Property News
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Fortress Income Fund is benefiting from its strategy of investing in small retail centres in cities with good transport nodes where it sees scope for growth.

Mark Stevens

Propoerty loan stock group Fortress Income Fund, which listed two years ago, is benefiting from its strategy of investing in small retail centres in cities with good transport nodes where it sees scope for growth.

Fortress MD Mark Stevens said yesterday that although the general property market remained tough, Fortress had been shielded because of increasing demand at the low end.

"The market we are serving is not overly affected by the recession because their income is mostly government grants, which have not dropped. We are seeing improvement in the niche retail sector we operate in and believe there is still scope for this sector to develop further," Stevens said.

Fortress posted a 7,53% increase in distributions for the year ended June, to 114,27c compared with 79,72c for the previous financial period of nine months.

The distributions for the six months ended June are 50,80c and 6,63c per A and B linked unit respectively, representing growth of 5% and 38,4% over the comparative period. He said the portfolio spread had also changed as the fund focused more on retail.

Its exposure to retail had increased to 57%, from 50% in the previous year. Its industrial exposure had declined to 29% of the portfolio, from 37% previously.

"Fortress is somewhat of a hybrid fund and plans to increase its exposure to other listed counters (local and offshore). We are slowly getting out of industrial," Stevens said. Despite tough trading conditions, it reduced vacancies to 5,6% from 5,7%.

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