Energy security key to the future of logistics and retail in South Africa

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Sustainable solutions lead to long-term rental commitments by tenants

Although the installation of solar PV plants is still a viable renewable energy option that indirectly helps reduce the pressure caused by load shedding, solar alone is not enough. Providing energy security for logistics and retail tenants requires a combination of solar, batteries, generators and smart meters and other sustainable initiatives that help reduce carbon emissions and provide a reliable energy source.

Stephen Brown, CEO of Fortress, said: “The goal of our energy program is to provide our tenants with the highest level of energy security at a reasonable cost. It includes the use of solar energy, generators, smart metering systems and batteries. Tenant feedback has been overwhelmingly positive for our energy programs, and tenant-level uptake has exceeded our initial expectations.”

As an example, Cipla has signed a 10-year lease extension until October 2033 for the 18,214m² warehouse they currently occupy in Cape Town, mainly due to the energy project undertaken by Fortress.

The future energy mix for a building will consist of grid power, solar PV (or other renewables), batteries and generator combined with smart meters and connectivity – a complete mini-grid solution. Investing in different energy sources will provide sustainable, reliable and cost-effective energy.

Currently, each asset has a customized energy plan based on the needs of the tenants and the capabilities and limitations of each asset,” Brown explained. The first steps include the installation of solar and smart meters and will follow with the installation of batteries as soon as Fortress is comfortable with implementing the technology and it is financially feasible.”

This plan is continually revised as technology matures and alternative options come to market. “The impact of ongoing load shedding on our tenants' businesses, and indirectly on our business, can be mitigated by ensuring continued power supply to critical items. This requires embedded generation at the asset level, combined with a more focused demand-side energy management system, with both energy efficiency and stability of supply,” commented Brown.

As of December 31, 2023, Fortress has 42 solar PV installations in operation, compared to 25 installations as of June 30, 2023. As of December 31, 2023, Fortress has completed eight plants, with another eight planned for completion by June 30, 2024, thus aiming for a total of 58 plants by 2024.

“Our installed capacity as of December 31, 2023 was 15,293 MW, compared to 9,633 MW as of June 30, 2023. Our goal is to increase our installed capacity to 22.4 MW by June 30, 2024. Our plan is to add another 12.0 MW. Through 37 projects planned by June 30, 2025. This will increase our consumption of renewable energy to approximately 22% of total consumption,” said P.K. Potgieter, Fortress's stability manager.

Brown continued. “Installation of backup generators is ongoing and we aim to have our core retail portfolio on backup power by June 30, 2024. Generators only supply critical loads, enabling us to keep generator size and running costs down. as low as possible while allowing our tenants to trade during periods of off-loading and power outages. We anticipate that battery storage will be added to this solution over time.”

The Fortress Logistics team plans to certify all existing and new properties in Central and Eastern Europe as BREEAM “Excellent” and is preparing further solar deployment plans in Romania and Poland following the successful deployment of solar PV plants in Poland. .

The fort is perfectly positioned to generate power. The company has a “solar farm” in its retail, logistics and industrial portfolios with more than 2.5 million square meters of rooftop space. “We've designed our new buildings from the ground up with solar power in mind, including wheel-to-wheel transportation and on-site manufacturing capabilities for park needs. Over time, the excess roof space can be used to generate electricity to transport to our other properties, or we can sell the excess power to other users,” Brown said. A castle is built with the same efficiency for all their developments, but the details lie in how the building is used. Standard design elements include maximizing natural light and ventilation, building orientation, LED lights, energy-efficient air conditioners, and more.

“We are focused on providing tenants with turnkey solutions for utilities: fiber, renewable energy, backup energy solutions and smart meters; all of this will be included in the fort's property lease,” Brown concluded.

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