Fortress Real Estate Investments has laid out plans to double the solar capacity at its properties by 2025.
At the end of June, Fortress had 25 operational solar plants across its 15 retail properties and 10 logistics assets.
The group said for the 2024 and 2025 financial years, it aims to increase its solar plants to 47 and 83, respectively.
Fortress increased installed portfolio capacity from 7.248MW during the 2022 financial year to 10.58MW.
Fortress, with more than 2.5-million square metres of rooftop across the retail, logistics and industrial portfolios, is well-positioned to produce energy. At the end of June, renewable energy generated increased from 10.733MWh to 11.970 MWh.
PC Potgieter, sustainability manager for Fortress, said to date Fortress has spent R168m on solar capex, with about R121m approved for the current pipeline — with a future pipeline capex of R316m.
However, Fortress said while the installation of solar photovoltaic (PV) plants is a viable renewable energy option to indirectly help in alleviating the pressure caused by load-shedding, solar alone is not enough.
“In addition to renewable energy, green leasing is a solution for long-term sustainability of the business,” said Potgieter.
Green leasing aims to promote environmentally sustainable practices and align the expectations and requirements of landlords and tenants. It incorporates clauses where both parties undertake specific obligations aimed at improving the sustainable performance of a building.
Potgieter said green leasing may include waste-reduction targets, water conservation initiatives, the use of sustainable materials, green certification and improve indoor air quality. “Incorporating a green clause is an active tool that enables the company to better negotiate new leases and renewals.”
Green lease clauses, which first emerged more than 15 years ago, remain largely self-defined as there is still no industry-wide guidance on minimum standards, according to Jones Lang LaSalle (JLL), a New York Stock Exchange-listed global real estate and investment management services company.
JLL cited lack of transparency, legal complexities, split incentives and unrecognised value as persistent barriers to green lease adoption.
However, this is changing as many property owners have set themselves net-zero targets to achieve an ideal balance between emissions produced and those removed from the atmosphere to reduce global warming.
JLL said green leases will differ between parties and buildings, adding that at a basic level, all green leases should have clauses that require data sharing of energy, water, waste and green certification, or environmental performance rating protection.
Each Fortress asset has a customised energy power plan based on tenants’ needs and the opportunities and constraints within each asset.
“This requires a combination of solar, batteries, generators, smart meters and other sustainable initiatives that contribute to lowering carbon emissions and provide a reliable power source,” said Potgieter.
For example, smart meters provide real-time data on electricity and water usage — leading to higher efficiency and lower costs for everyone.
Bruce Collins, head of asset management at Fortress, said Fortress is able to produce more energy than its tenants can consume — so “wheeling becomes key in enabling us to generate additional revenue”.
Wheeling is the transportation of electricity from a generator to a remotely located user through existing distribution systems or multiple networks such as through Eskom to a municipality.
“The government and local councils need to get their act together to enable corporates to start wheeling excess power so other buildings can benefit,” said Collins.
According to Chris Wild, executive director for Food & Trees for Africa, corporates and civil society need to hold the government to account for environmental integrity standards insofar as renewable energy, as opposed to coal, nuclear power or fracking and gas are concerned.
Fortress CEO Steven Brown said a key focus is on embedded generation at each asset, as well as demand management and efficiency initiatives being implemented in conjunction with tenants.
Brown said the mutual beneficial strategy is already paying off. One of its tenants, Cipla, has signed a 10-year lease extension agreement until October 2033 for an 18,214m² warehouse they occupy in Cape Town, mainly due to the implementation of the energy plan.
“We are focused on providing a turnkey solution for utilities to tenants — fibre, renewable energy, backup power solutions and smart meters — all of this will be included when signing a lease for a Fortress property,” said Brown.
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