Wrap Text
Launch of accelerated bookbuild offering of Fortress B ordinary shares
FORTRESS REAL ESTATE INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2009/016487/06)
JSE share code: FFB
ISIN: ZAE000248506
Bond company code: FORI
LEI: 378900FE98E30F24D975
("Fortress" or "the Company")
LAUNCH OF ACCELERATED BOOKBUILD OFFERING OF FORTRESS B ORDINARY SHARES
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAWS AND
REGULATIONS. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF
SECURITIES IN THE UNITED STATES OR ANY JURISDICTION.
INTRODUCTION
Fortress hereby announces the launch of a placing of approximately 52 million new Fortress B ordinary shares (the "Placement
Shares"), representing circa 4.3% of the issued Fortress B ordinary share capital, by way of an accelerated bookbuild offering (the
"Placement"), subject to pricing acceptable to Fortress and to the Joint Global Coordinators (as defined below).
The Placement is being made to qualifying investors only (as described in greater detail in the "Important Notice" disclaimer
below), subject to customary selling restrictions, and is not an offer to the public in South Africa or in any other jurisdiction.
Participation in the Placement is reserved for invited investors only and is subject to the terms and conditions provided to the
invited investors.
The Placement will be implemented by way of an accelerated bookbuild offering. The book for the Placement is open with
immediate effect and is expected to close as soon as possible.
The Placement Shares will be issued by the Company under and pursuant to its existing general authority to issue B ordinary shares
for cash, granted by shareholders at Fortress' annual general meeting held on 1 December 2025.
RATIONALE FOR THE PLACEMENT
Fortress has consistently communicated its long-term strategy to position itself as a leading, specialised fund with a focus on retail
and logistics. Central to delivering on this strategy is the expansion of the South African ("SA") retail portfolio, and the continued
rollout of the existing logistics development pipeline in SA and Central and Eastern Europe ("CEE"), complemented by other
suitable opportunities that align with Fortress' investment and strategic objectives.
The Company's current development pipeline in SA and CEE, excluding land options, consists of approximately 380 000m² of
undeveloped gross lettable area ("GLA"), of which approximately 73 000m² is currently under development. The total value of
undeveloped GLA in the development pipeline, which largely remains non-committed, is approximately ZAR5.2 billion, the
development of which is expected to be completed over the next three to five-year period, depending on market conditions.
Historically, the development pipeline has been predominantly funded through the sale of non-core assets, bringing partners into
developments (both investors and tenants) as well as additional borrowing capacity brought about by upliftment in the value of
Fortress' asset base, which we forecast to continue on a similar trajectory as has been the case historically. While Fortress will
continue to realise value from its non-core portfolio (currently valued at approximately ZAR2.5 billion) and increase borrowings
in line with a prudent loan-to-value ratio should asset valuations continue to rise as expected, the value of Fortress' non-committed
development pipeline now exceeds that of the residual portfolio of non-core assets. As such, the Placement will enable prudent
and optimal management of the pace of non-core asset sales, without compromising the funding required to execute on the
Company's non-committed development pipeline and / or expansion of and enhancements to its existing core assets.
Accordingly, the Placement proceeds will be used to advance the rollout of the SA and CEE logistics development pipeline and to
conclude on retail opportunities that align with Fortress' investment criteria. Until these developments, expansions, enhancements
and acquisition opportunities are finalised, the Placement proceeds will, in the short-term, be deployed in a manner that avoids any
significant cash drag and continues to support a healthy loan-to-value position.
For further information, shareholders and noteholders are referred to the Company's unaudited interim financial results
announcement for the half-year period ended 31 December 2025, released on SENS on 26 February 2026. Shareholders are further
referred to Fortress' trading and pre-close operational update released on SENS on 10 June 2026, both available on the Company's
website at www.fortressfund.co.za.
THE PLACEMENT
The Placement will be offered to qualifying investors (as described in greater detail in the "Important Notice" disclaimer below)
and will not be offered to the public in any jurisdiction, nor will it be offered in any jurisdiction in which the Placement would
give rise to an obligation to file or register any offering or related documentation with any securities regulatory authority.
The Placement Shares, when issued, will be credited as fully paid, and will rank pari passu in all respects with the existing B
ordinary shares of the Company. Pricing and allocations will be announced as soon as practicable following the closing of the
book. The timing of the closing of the book, and the price at which the Placement Shares will be placed, are at the sole discretion
of the Company, and Rand Merchant Bank (a division of FirstRand Bank Limited) and Morgan Stanley & Co International Plc
(together, the "Joint Global Coordinators") who, pursuant to a placement agreement entered into with the Company (the
"Agreement"), are acting as joint global coordinators and bookrunners for the Placement. Fortress has agreed, pursuant to the
Agreement, not to issue any further B ordinary shares for a period of 90 days after the closing of the Placement, subject to
customary exceptions and waiver by the Joint Global Coordinators.
29 June 2026
Joint Global Coordinator and Transaction Sponsor Joint Global Coordinator
Rand Merchant Bank (a division of FirstRand Bank Limited) Morgan Stanley & Co. International plc
Legal Advisors to Fortress Legal Advisors to the Joint Global Coordinators
DLA Piper Advisory Services Proprietary Limited and DLA Bowman Gilfillan Inc. t/a Bowmans and Milbank LLP
Piper UK LLP
IMPORTANT NOTICE
This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States (including its
territories and possessions, any state of the United States and the district of Columbia), Australia, Canada, Japan or any other
jurisdiction in which such release, publication or distribution would be prohibited by applicable laws and regulations. The
distribution of this announcement and the offering of the Placement Shares may be restricted by the laws in certain jurisdictions
and persons into whose possession any document or other information referred to herein comes should inform themselves about
and observe any such restrictions. No action has been taken by Fortress or the Joint Global Coordinators or any of their respective
affiliates that would permit an offering of the Placement Shares or possession or distribution of this announcement or any other
offering or publicity material relating to such securities in any jurisdiction where action for that purpose is required. Any failure
to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
This announcement is for information purposes only and does not constitute or form a part of any offer or solicitation to purchase
or subscribe for securities to any person in the United States, Australia, Canada or Japan or in any jurisdiction to whom or in which
such offer or solicitation is unlawful. The Placement Shares have not been and will not be offered to the public in any jurisdiction
in circumstances which would require the preparation or registration of the Placement Shares or any offering document relating to
the Placement in such jurisdiction.
The Placement Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities
Act") or the securities law of any state or other jurisdiction of the United States, and accordingly may not be offered or sold,
directly or indirectly, in or into the United States unless registered under the Securities Act or pursuant to an exemption from, or
in a transaction not subject to, the registration requirements thereof. Accordingly, the Placement Shares are being offered and
placed only in "offshore transactions" meeting the requirements of Regulation S under the Securities Act. There will be no public
offering of the Placement Shares in the United States or in any other jurisdiction in which offers, sales or announcement would be
prohibited by applicable laws and regulations.
The offer and placement of the Placement Shares have not been, and will not be, registered under the applicable securities laws of
Australia, Canada or Japan. Subject to certain exceptions, the Placement Shares referred to herein may not be offered or sold in
Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan.
There will be no public offer of Placement Shares in Australia, Canada, and Japan.
This announcement does not constitute or form a part of any offer or solicitation or advertisement to purchase and/or subscribe for
shares in South Africa, including an offer to the public for the sale of, or subscription for, or the solicitation of an offer to buy
and/or subscribe for, shares as defined in the South African Companies Act, No. 71 of 2008, as amended ("the South African
Companies Act") and will not be distributed to any person in South Africa in any manner that could be construed as an offer to
the public in terms of the South African Companies Act. This announcement does not, nor is it intended to constitute a "registered
prospectus" as contemplated in the South African Companies Act. This announcement does not comply with the substance and
form requirements for a prospectus set out in the South African Companies Act and the South African Companies Regulations of
2011 promulgated thereunder, and has not been approved by, and/or registered with, the South African Companies and Intellectual
Property Commission.
In South Africa the Placement was not and will not be an offer to the public as defined in the South African Companies Act and
only: (i) persons falling within the exemptions set out in section 96(1)(a) of the South African Companies Act; or (ii) persons who
subscribe, as principal, for shares at a total contemplated acquisition cost equal to or greater than R1,000,000, as envisaged in
section 96(1)(b) of the South African Companies Act, and in each case to whom any offer to participate in the Placement is
specifically addressed (all such persons in (i) and (ii) being referred to as "relevant persons"), will be entitled to apply for
Placement Shares in the Placement. Any investment activity to which this announcement relates will only be available to, and will
only be engaged with, relevant persons. Any person who is not a relevant person should not act on this announcement or any of
its contents. This announcement does not, nor does it intend to, constitute any offering document relating to the Placement.
The information contained in this announcement constitutes factual information as contemplated in section 1(3)(a) of the South
African Financial Advisory and Intermediary Services Act, 2002 ("FAIS Act") and should not be construed as an express or
implied recommendation, guide or proposal that any particular transaction in respect of the Placement Shares or in relation to the
business or future investments of Fortress, is appropriate to the particular investment objectives, financial situations or needs of a
prospective investor, and nothing in this announcement should be construed as constituting the canvassing for, or marketing or
advertising of, financial services in South Africa. Fortress is not a financial services provider licensed as such under the FAIS Act.
In member states of the European Economic Area this announcement and the Placement was and will only be directed only at
persons who are "qualified investors" within the meaning of the Prospectus Regulation. For these purposes, the expression
"Prospectus Regulation" means Regulation (EU) 2017/1129, as amended. In the United Kingdom this announcement and the
Placement was directed only at "qualified investors" within the meaning of the UK Prospectus Regulation: (i) who have
professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act
2000 (Financial Promotion) Order 2005, as amended (the "Order"); or (ii) who fall within Article 49(2)(A) to(D) of the Order;
and (iii) to whom it may otherwise lawfully be communicated, and any investment activity to which it relates will only be engaged
in with such persons and it should not be relied on by anyone other than such persons. For these purposes, the expression "UK
Prospectus Regulation" means Regulation (EU) 2017/1129 as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018, as amended.
Each of the Joint Global Coordinators is acting exclusively for the Company and no-one else in connection with the Placement.
They will not regard any other person as their respective clients in relation to the Placement and will not be responsible to anyone
other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to
the Placement, the contents of this announcement or any transaction, arrangement or other matter referred to herein.
Neither of the Joint Global Coordinators or any of their respective directors, officers, employees, advisers or agents makes any
representation or warranty, express or implied, as to the accuracy, completeness or verification of the information set forth in this
announcement, and nothing contained in this announcement is, or shall be relied upon as, a promise or representation in this
respect, whether as to the past or the future. Neither of the Joint Global Coordinators or any of their respective directors, officers,
employees, advisers or agents accepts any responsibility for its accuracy, completeness or verification and, accordingly, disclaim,
to the fullest extent permitted by applicable law, any and all liability which they might otherwise be found to have in respect of
this announcement or any such statement.
This announcement includes "forward-looking statements". Forward-looking statements are statements that are not historical facts
and may be identified by the use of words such as "anticipate", "believe", "continue", "should", "will", "target", "forecast",
"expect", "potential", "intend", "estimate", "strategy", "can" and other similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. The forward-looking statements set out in this announcement involve a
number of known and unknown risks, uncertainties and other factors, many of which are difficult to predict and generally beyond
the control of Fortress, that could cause Fortress' actual results and outcomes to be materially different from historical results or
from any future results expressed or implied by such forward-looking statements. Actual events may differ significantly from any
anticipated development due to a number of factors, including without limitation, changes in public sector investment levels,
changes in the general economic, political and market conditions in the markets in which Fortress operates, Fortress' ability to
attract, retain and motivate qualified personnel, changes in Fortress' ability to engage in commercially acceptable acquisitions and
strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions.
The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject
to change without notice. Fortress does not undertake any obligation to review, update, confirm, or to release publicly any revisions
to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this
announcement.
This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be
associated with an investment in the Placement Shares. Any investment decision to buy Placement Shares in the Placement must
be made solely on the basis of publicly available information, which has not been independently verified by the Joint Global
Coordinators and/or the Company.
This announcement does not represent the announcement of a definitive agreement to proceed with the Placement and, accordingly,
there can be no certainty that the Placement will proceed. The Company reserves the right not to proceed with the Placement or to
vary any terms of the Placement in any way.
The Placement Shares to be sold pursuant to the Placement are admitted to trading on the stock exchange operated by the JSE
Limited with a secondary listing on the A2X Stock Exchange and, so far as the Company is aware, it is not intended that they will
be admitted to trading on any other stock exchange.
Date: 29-06-2026 05:22:00
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The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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