Wednesday, 01 March 2017

Fortress Income Fund launches R650 million Louwlardia development

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The JSE listed Fortress Income Fund has officially launched the Louwlardia Logistics Park, a R650 million A Grade logistics facility that is under development alongside the N1 in Centurion.  

Speaking at the launch,  executive director Andrew Teixeira said that Louwlardia was part of the 1 million sqm of warehousing that is due to be developed by Fortress over the next five years. This equates to a combined investment of an estimated R8 billion in South Africa’s logistics sector during that period.  

Fortress Income Fund has become a powerhouse in the South African property industry since listing in 2009. Innovative asset management and a diverse property portfolio has seen the fund showing positive growth every year.  

The fund focuses on development of prime logistic warehousing, retail centres and strategic offshore investments. Fortress owns 336 investment properties valued at R28,7-billion at the end of December 2016 and has one of the largest logistics property development pipelines in South Africa.   Louwlardia, which will see approximately 90 000 sqm of warehousing developed on the 16,7 hectare site, is expected to be completed within the next 24 months.  

The first phase, which comprises a 21 785 sqm warehouse with 1 843 sqm offices, is complete and ready for occupancy. It has already drawn a great deal of interest from prospective blue chip tenants.  

National leasing manager, Grant Lewington, said that Louwlardia was an example of the Grade A logistics facilities that the fund is developing in three major nodes - Gauteng, Cape Town and Durban.  

The Fortress Income Fund’s portfolio is strongly weighted towards logistics facilities located in prime locations. These are let to corporate tenants on long leases.  

The focus on logistics is due to ever increasing demand for these sorts of facilities from companies operating in a highly competitive economy that is driven by imports, primarily through Africa’s busiest container port, Durban.  

South Africa’s economy is transport intensive and imports destined for South Africa as well as  neighbouring countries are expected to grow. Already logistics is one of the fastest growing service sectors in the economy, ensuring a strong income stream for the fund going forward.  

Teixeira emphasised that, as long term holders of property, Fortress is focussed on delivering a quality product and was setting new trends in the development of logistics facilities in South Africa.  

“In a tough economy where cost containment and efficiency are king, we are actually providing A grade logistics at a lower cost.  With properties that offer high tech design that includes the likes of solar and natural light to reduce power consumption, strategic locations that make for more efficient distribution and properties that provide easy access and better turnaround times, we are effectively lowering the cost per pallet,” he explained.  

Lewington noted that Fortress continued to strengthen its position as the preferred developer of logistics warehouses by delivering a technically superior product that, together with the group’s strategically located land, would ensure a sustainable development pipeline.  

He emphasised that all of Fortress’s parks were developed according to global best practice and to the highest standards. They include the provision of adequate internal height, flat floors, large loading areas with hard wearing concrete surfaces as well as good access to freeways and arterial routes.  

The newly launched warehouse at Louwlardia has a height of 13,5m to the underside of the eaves which offers efficiencies of scale and an FM2 floor which provides a solid platform for the erection of racking and easy movement of mechanised machinery with a 38m yard.  

It also provides a secure park environment with 24 hour security, a central gate and electric fence as well as a fire system with central pumps and tanks that will serve the entire park.  

Green building best practice is incorporated via features such as low maintenance indigenous landscaping that is fully irrigated and buildings that can accommodate photo voltaic cells for the production of electricity.  

However, the key draw card remains Louwlardia’s prime location with excellent highway visibility and accessibility to road, rail and domestic and international air freight hubs.   “It is well situated adjacent to the N1 highway between Johannesburg and Pretoria with access from the N1 via Brakfontein and Nellmapius Roads.  It is also well connected to two major alternative routes (the R21 and N14) and provides easy access to both the OR Tambo and Lanseria Airports as well as major centres,” he explained.  

He added that the N1 frontage was a prime location with excellent highway visibility for signage and branding.  

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Note to editors:   Additional new projects under development by Fortress nationally include:  

Union Park, Germiston: The initial 24 000 sqm logistics facility already developed on this property is home to a large multinational tenant. Fortress is in the throes of developing a further 65 000 sqm of A grade logistics space here with the first 13 400 sqm of prime space expected to be available for occupation by October 17. JT Son Construction has been appointed the main contractor on the initial phase of the total R300 million project. “We needed to improve access to this property. Now that this has been substantially improved, with a new entrance we’ve unlocked excellent land that is particularly suitable for warehousing and light manufacturing. We are developing state of the art facilities that complement this strategic location,” says Jason Cooper, development manager. He said that the location had long been identified as a logistics hub by large logistics operators such as Massmart, D.S.V, Imperial and House and Home. Situated opposite Rand Airport, Union Park’s tenants will benefit from 24 hour security in a well-designed logistics park environment that is strategically located close to both the N3 and the N17, making it ideal for prospective tenants commuting between Johannesburg and Durban.  A major plus is that trucks can avoid congestion at the Geldenhuys and Giloolys interchanges.  

Westlake View, Gauteng: Conveniently located off the N1 Modderfontein, this R350 million development is particularly suited to big box users looking for a strategic position in this sought after logistics hub where land for development is very limited.   Construction of the first phase of this development -   a 17 838 sqm warehouse with 2 040 sqm of office space – has just been completed. The 25 000 sqm second phase is due to start in the middle of this year and will be ready for occupation in mid-2018.   Development manager, Konrad Kohler, said there had already been a great deal of interest from prospective end users.  

East Port Logistics, Gauteng: Located on the R21, near the Serengeti development and OR Tambo International Airport, this 110 hectare site will see development begin in mid-2017. The 500 000 sqm of prime logistics space will be developed in 5-7 years with the first 30 000 sqm warehouse expected to be completed during the third quarter of 2018.  

Clairwood Logistics Park, Durban: Construction of this R3,5 billion facility began late last year. It is located on the former Clairwood Race Course, the only remaining flat land available for a greenfields development in south Durban. As such, it is 11,2 kilometres from the existing container terminal entrance and 3,5 kilometres from the site set aside for the Durban Dig Out port. On completion, it will include 350 000 sqm of warehousing in a well reticulated high tech park.   Development manager, Nico Prinsloo says that the R135 million allocated towards updating aged infrastructure, including surrounding roads, traffic intersections and pedestrian thoroughfares as well as on ramps to the nearby freeway are expected to significantly improve tenants’ convenience and will facilitate traffic flow in what is one of the most congested areas of the city.  

Cornubia Ridge Logistics Park, Durban:  This joint venture with M&F Giuricich Developments will comprise 80 000 sqm logistics and 30 000 sqm retail space set on a 27 hectare site beside the N2 opposite Umhlanga’s Gateway precinct. It is within 10 minutes of the King Shaka International airport and the Dube TradePort and close to Durban’s evolving GO!Durban rapid transport network.   The joint investment is expected to be around R1 billion.  

“Access was a key element in our decision to buy the property. It has great micro and macro access to the N3 and tenants will benefit from its proximity to the massive Umhlanga interchange which is due for completion by the end of the year. There is a shortage of land for the development of a prime logistic facility such as this in greater Durban. An added bonus is that this site will be connected to the Gateway precinct via the N2 Cornubia Bridge, making it the ideal location to service logistics hubs in Northern KZN as well as Durban,” says development manager, Konrad Kohler.  

Earthworks for the first phase of the development have just begun and the first 20 000 sqm warehouse is expected to be complete within nine months and ready for occupation during the third quarter of next year.