Resilient | NEPI Rockcastle | Fortress REIT A new growth path
NEPI Rockcastle (NRP) recently reported results for the HY through June 2018, while Resilient REIT (RES) and Fortress REIT (FFA/B) reported for the full year.In this note we assess the earnings outlook for each business in the context of a higher cost of equity across the Group, as well as the impact of material balance sheet changes at RES and FFA/B. We analyse the NAV of each counter under various scenarios in order to support our overall valuation assessment, underpineed by a dividend iscount model.
A letter sent by some of South Africa's largest fund managers to the directors of RES, FFA/B, NRP and Greenbay Properties (GRP) during August indicates the investment community is concerned that existing investigations into allegations of market manipulation are not broad enough. We have encountered various attitudes regarding the veracity of allegations made and we do not attempt to determine whether the unresolved allegations facing the Group are true. However, we note that any findings made by a regulatory or private investigation may create volatility in the share price of RES, FFA/B and NRP.
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.
NEPI Rockcastle is engaged in developing, acquiring and holding commercial properties, either directly or indirectly through the acquisition of listed equities.
Resilient Property Income Fund is engaged in property investment in South Africa. Co. operates through the following business segments: Corporate, Retail, Industrial and Commercial.
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