Lifestyle

Sisa Ngebulana a classic example of a black industrialist

By Thabang Mokopanele

Sisa

Sisa Ngebulana who has risen to the top of the listed commercial property ladder is a classic definition of a successful black industrialist, a concept which refers to black people directly involved in the origination, creation, significant ownership, management and operation of their own industrial enterprises.

Since the fall of apartheid, the democratic government has been involved in an organised effort to reconstruct South African society in a manner that overturns the apartheid social and economic architecture. Ngebunala’s rise in real estate and his entrepreneurial savviness learned at the knees of his grandfather and father bears testament to what can be achieved in the democratic country with equal opportunities for everyone.

Where it all started and his roots

Ngebulana, a founder and chairman of commercial property developer Billion Group and CEO of JSE-listed real estate investment trust Rebosis has always had entrepreneurial genes. He comes from an entrepreneurial family – his grandfather who is his greatest inspiration ran a brick making factory and his father a general dealer in Mthatha in the Eastern Cape. Internalising his grandfather’s strong morals and work ethics, Ngebulana grew up with a solid foundation of being exposed to his grandfather’s practical example of how to become a successful self-made entrepreneur. His grandfather also taught him financial fundamentals: how to save money, to be curious and resourceful in creating wealth and leaving a legacy. He also learned valuable lessons on investing in property and stock markets.

He fondly remembers being involved in the building of local houses as a youngster, planning four-bedroom brick houses and rondavels on a piece of paper, preparing plans and foundations, doing the costings without a calculator and co-ordinating the building himself.

After matriculating from St John’s College in Mthatha and moving to study law at the University of KwaZulu Natal, he enrolled as an estate agent with Realty Elk to finance his studies and living expenses. He sold around 28 homes and became one of the best local agents in Maritzburg using his entrepreneurial skills to his advantage.

Armed with a law degree and an experience as an estate agent, Ngebulana then moved to Pinelands, Cape Town, where he completed his articles at Jan S de Villiers law firm between 1992 and 1994. To make ends meet, he bought a tow bar and launched a furniture removal business. He also opened a commercial estate agency in Cape Town.

Qualified as a commercial lawyer, he moved to Johannesburg and set up a fulltime transport business, Blue Truck Rentals, before accepting a position as a legal advisor, specialising in finance and treasury derivatives and transactions, at Eskom.

Rise to the top

Seeing and seizing an opportunity, he ventured into upmarket residential property development – one property at a time funded by mortgage loans. In 1999, Ngebula returned to the property game, this time developing property in Kyalami Estate and Dainfern. This was followed by other developments, including a cluster development with 20 units in Bryanston and a cluster in Hyde Park in 2000.

He then subdivided a big parcel of land he owned in Dainfern and took an option on land in a cluster housing development in Hyde Park. That’s when the Billion Group came into conception. Under the name Billion Investments trading as Billion Afcon, he invested in artist’s impressions, building plans and sales material and pre-sold all the units in the development. “I conceptualised the Billion Group from developing one single home to the next, brick by brick,” says Ngebulana. “I then moved into developing clusters in Kyalami and Dainfern and Hyde Park. I picked the top end of the market because the margins were higher.”
Commercial property journey

Ngebulana’s next rise to the top in commercial real estate kicked off in 1997 after he founded the Billion Group which initially focused in residential property, but his next move was into the commercial property market and his background in commercial law and finance gave him an edge especially in commercial property development and ownership.

Then in the early 2000’s when the insurance, financial and other corporates were moving out of Pretoria’s central business district (CBD) to new business nodes he moved into the commercial property game full time. “There was a critical mass of government tenants there. Big companies were dumping their stock so I bought three buildings cheap and sat on them for years,” Ngebulana says.

Billion has been involved in commercial development since 2003 developing commercial properties from offices to shopping centres. “To create wealth you have to develop properties from scratch. You can’t do it by just buying properties.”

There is no disputing that Ngebulana is certainly a successful and shrewd businessman. The Billion Group is not your average black economic empowerment company. For one it has been in operation since 1997 and actually owns assets. “Unlike some of those lease deals where the government lease is necessary to secure the bond, we actually own our buildings, and have done so for years,” he says.

Proofing his mettle

Getting into the commercial property game became a natural fit for Ngebulana. His first project was the development of Mdantsane City, a regional mall located in Mdantsane township between East London and King Williams Town. His company Billion Group developed Mdantsane City from scratch and went on to create much needed jobs in the township while also contributing to the Eastern Cape’s tax revenues.

He understood before anyone the potential economic power of townships. “We underestimate the economic power in the townships,” he says. Ngebulana was now becoming a serious and key player in the commercial space. He was now in the spotlight after beaten SA’s biggest investment and development guns -Atterbury, ZenProp and Investec Property to build Hemingways Mall, which today is one of South Africa’s 20 largest malls. In developing regional shopping centres, Sisa was blazing a trail as an independent black property developer at a time a when retail property development was the exclusive domain of institutional investors, such as Old Mutual and Liberty.

The experience opened his eyes to the real cut and thrust of large regional commercial property development and led to the establishment of the groups contracting arm. This was because – with title and tenants in hand – Billion could not find a contractor. They were tied up with world cup commitments. So they built it themselves. He lured a high powered team from one of the big four contractors – resulting in understandable fury. “They vowed to close us down and almost succeeded. We had to source equipment and infrastructure from out of the country because some suppliers were afraid to supply us,” he says. As the Billion Group expanded, the company needed to raise capital to facilitate the purchasing of additional properties and reduce the group’s debt. . In 2011, the Billion Group packaged a portion of its property portfolio of about R1.5 billion and listed it on the JSE under the name Rebosis Property Fund, with the Billion Group providing the asset management and property management for the Rebosis portfolio.

On listing in 2011, Rebosis was distinguished as the first black-managed and substantially black-held property loan stock to list on the Johannesburg Stock Exchange (JSE). In July 2013 the fund was approved as a Real estate investment trust (REIT). Rebosis’ high-growth, defensive portfolio comprises 19 quality properties covering a gross lettable area (GLA) of 414,390sqm across Gauteng, the Eastern Cape, KwaZulu-Natal and the North West provinces. Strategically the portfolio is primarily retail-focused, with a balance of government office space.

Retail properties comprise 54% of the portfolio by value and 163,303sqm of the portfolio by GLA. It also features 14 large, single-tenanted commercial offices in nodes attractive to the South African government, comprising 44% of the total portfolio by value and 232,133sqm by GLA. Rebosis has a market capitalisation of R5.69 billion and assets under management of R7.88 billion.

Giving back

Reflecting on his achievements, Ngebulana says it is not about the money. He highlights the importance of partnerships, as the property development industry helps to facilitate transformation in South Africa. “It is about leaving a legacy of having created some of the iconic structures in this country and some of the best malls in this country. We also have a massive social programme and have built schools and churches and contribute to a lot of social causes.”

Leaving a legacy is important to Sisa, and his companies are active in many corporate social responsibility programmes, including offering bursaries to South African pupils to create entrepreneurs and leaders for the future.

Tips on investing

Sisa’s top tips for property investors and entrepreneurs is building wealth brick by brick, educating oneself about property; acquiring a savings culture rather than spending; starting small and keep building; focusing on one area of investment and finally investing in appreciating assets such as real estate.

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