Fortress Fund looking up

THE Fortress Caribbean Property Fund recorded a much improved performance in the first half of this financial year.It produced net income of $1.8 million for the six months ended March 31, 2010, compared to $74 000 for the corresponding period in 2009.In addition, total net assets of the fund increased by 3 per cent to $83.5 million while its net asset value per share increased from $1.45 to $1.50.In a recent half-year report, Fortress reported net fair value gains of $926 000 during the last six months compared to fair value losses of $1.08 million during the same period last year. Total assets increased from $121.5 million to $124.4 million while total liabilities declined slightly from $26.7 million as at March 31, 2009, to $26.4 million this year.At the end of the six-month period the fund was trading at $1.15 per share – 23 per cent less than the $1.50 net asset value per share.According to the report, the fund’s financial position remains very strong and the outlook over the long term is positive, but the short term is still uncertain.“It is unlikely that the local real estate markets will regain the sales and growth levels in the medium term that occurred at the peak of the market, as the levels of credit from commercial banks are no longer there. “Buyers are much more discerning and the days of selling ‘off-plan’ are no more,” the report stated.It was therefore suggested that developers will need to invest more equity to get projects going, and paybacks are likely to be longer with lower returns on capital.“That being said, interest rates remain extremely low and this is forcing investors to look beyond the bank account. Solid income streams from quality commercial properties with decent yields are once again attracting investor attention,” the report continued.The property fund said its focus would be to turn over non-income producing assets and put new capital to work in higher-yielding opportunities. (NB)