Pick n Pay and Fortress are co-investing in a distribution centre development.
Fortress REIT announced that it has signed its biggest logistic developer with grocery retailer Pick n Pay. The deal was signed at Reit's flagship premium-grade Eastport Logistics Park in Gauteng.
In a statement, Fortress said Pick n Pay confirmed the new development would cover 36 hectares of the infrastructure.
Fortress said it would ultimately own 40% of the development, with Pick n Pay acquiring 60% of the new inland distribution site once the subdivision was approved and the transfer completed.
“Fortress will fund the incremental capital required for the development from existing available facilities. The development is scheduled for completion in 2023,” Fortress said.
Fortress Reit chief executive Steven Brown said he was proud to welcome Pick N Pay to Fortress’s premium-grade logistics portfolio at Eastport and add one of the largest FMCG distribution centres on the African continent to its portfolio.
“The long-term Pick n Pay lease with an option to extend, as well as grow the size and footprint of the facility, 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,” said Brown.
Pick n Pay chief executive Pieter Boon said that the grocery retailer’s newest inland distribution centre is a key investment in competitive advantage.
“Fortress’s Eastport facility will help us 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,” said Boone.
The partnership will see Fortress Logistics on track to roll out its strategy of developing and owning two-thirds of its portfolio in logistics, “making us the largest owner and on-going developer of core, premium-grade logistics real estate in South Africa”, said Brown.
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