Real estate investment company Fortress has inked its biggest logistics development agreement to date with retailer Pick n Pay at the premium-grade Eastport Logistics Park, near OR Tambo International Airport, in Gauteng.
The new development will cover 36 ha of state-of-the-art infrastructure and is slated for completion in 2023.
Fortress will own 40% of the development, with Pick n Pay holding the balance of the new inland distribution site once the subdivision has been approved and the transfer completed.
Fortress will fund the incremental capital required for the development from existing available facilities.
The long-term Pick n Pay lease has an option to extend and has the option to grow the size and footprint of the facility, which is set to “position Fortress’s Eastport Logistics Park and the broader R21 area as South Africa’s prime logistics hub as allied industries and businesses seek proximity and rational integration into the country’s leading logistics ecosystem,” says Fortress CEO Steven Brown.
Pick n Pay CEO Pieter Boon says the grocery chain’s newest inland distribution centre is a key investment in competitive advantage.
Fortress’s Eastport facility will “help [Pick n Pay] deliver key logistics and supply chain innovations, achieving efficiencies and growing market share at a time when faster and cheaper service of our stores has never been more important to deliver on our customer promise of low prices and reliable service,” he adds.
This signature partnership with Pick n Pay puts Fortress on track to roll out its strategy of developing and owning two-thirds of its portfolio in logistics, “making us the largest owner and ongoing developer of core, premium-grade logistics real estate in South Africa”, notes Brown.
The intensified tilt to e-commerce in recent years means that Fortress’s heavy logistics asset weighting has placed the company “in a prime position” to benefit from the rapid evolution in logistics and supply chain that have redefined retail in the wake of the digital and Covid-19 revolutions.
Key to Fortress’s success through disruption has been its “ability to partner with clients, powering their growth by understanding their challenges and supporting their own evolutions in response to change with state-of-the-art logistics boxes tailored to meet their own business and service ambitions”, says Brown.