Fortress REIT | Appendix: From order comes chaos
The sum of FFA and FFB shares outstanding (or a proportional investment in FFA and FFB shares) will deliver the same risk and return characteristics as a theoretical single ordinary share class structure would. Thus, the combined market cap of FFA and FFB shares outstanding must be treated as equivalent to a single share class structure for valuation purposes.We thus believe that, rather than being independently valued, the fair price attributable to FFB shares is an explicit function of the market price of FFA shares. All else constant, the value attributable to FFB shares declines by 54.5c for every 50c increase in the price of FFA (determined by the ratio of shares outstanding). Variability in the relationship between FFA and FFB units can only be explained by growth or contraction in Group-level NAV or changes in the fair Group-level P/NAV multiple.
Fortress REIT Limited, formerly Fortress Income Fund Limited, is a real estate investment trust (REIT), which invests in both physical property and listed property securities. The Company's segments include Logistics, Industrial, Office, Retail, Other, Corporate South Africa and Corporate Europe. The Company owns and develops logistics warehouses, which are let to corporate tenants on long leases. The Company also invests in retail properties focused on transport nodes. The Company's equity portfolio consists of both local listed REITs and international listed property securities. The Company focuses on development of prime logistic warehousing, retail centers and strategic offshore investments. The Company's portfolio includes development properties, industrial properties, logistics properties, office properties, residential properties, retail properties and other properties.
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