It runs in the blood! That might pass as a cliché of the worst kind but it best captures the story of Sedise Moseneke, who is making waves in the commercial property sector.
Moseneke emerged this week as an executive director of JSE listed commercial property player, Vukile Property Fund. This was part of a transaction which saw Vukile acquire a portfolio of properties from a vehicle driven by the Moseneke “clan” and featuring Sedise Moseneke as CEO. The 35 years old dental surgeon turned businessman also seats as the president of the South African Property Owners Association (SAPOA). He is the youngest Sapoa president ever.
In a swap deal tagged by the parties as a Black Economic Empowerment (BEE) transaction, the Moseneke vehicle, Encha Properties, sold a portfolio of five buildings to Vukile for R1.4bn. The transaction was settled through a mix of cash and Vukile shares. The cash is destined to settle the portfolio’s debt living Encha with an unencumbered R600m worth of shares in Vukile. This translates to 7.5% of Vukile which came to the deal with a portfolio of about 90 properties valued around R7.5 billion.
Properties in the Vukile portfolio include the East Rand Mall, Sandton Bryanston Grosvenor Shopping Centre, Durban Phoenix Plaza and the Dobsonville Shopping Centre. There is also the Cape Town Parow Industrial Park, Midrand Allandale Industrial Park, Roodepoort Robertville Industrial Park, Randburg Trevallyn Industrial Park, Pinetown Westmead and Kyalami Industrial Park.
This list explains why the Mosenekes are doing this deal. They are exchanging an exposure in five properties, predominantly national government-tenanted office buildings, for a stake in bigger, broader and more liquid portfolio. It is called diversification of risk. Off course this is an easier route. The alternative is harder. You grow your portfolio and then line it up for the gruelling self-driven JSE listing process. This gruelling path was opened by Sisa Ngebulana of the Billion Group in 2011. Sandile Nomvete, of Delta Property Fund, and his crew followed it last year. BEE purists prefer this path. This is because while the BEE player dilutes control in the process of listing, the BEE player remains in control.
But then, there are many ways to kill a cat. Living the sentimentalism aside, the path chosen by the Mosenekes creates the same value which would have been realised in the other path. That is all that matters right, value. Thomas Matlala knows this. He did a deal similar to the Mosenekes/Vukile transaction. Through a vehicle called Indite Property Fund, he carved a portfolio valued around R178m and injected it into a JSE listed entity called Arrowhead Properties. He is also now seating with unencumbered shares in a bigger entity.
What’s in it for Vukile, a property fund spun out of financial services giant Sanlam. They get to boost their BBBEE scorecard which comes with a bonus of a powerful grouping, the Mosenekes. Due to a mistake of South African history, the Moseneke’s never made it into the league of royal political families, the Mandelas, Tambos, Sisulus etc. But then that is a debate for another day.
Vukile does earn a strong BEE partner, the Mosenekes and Sedise Moseneke as an executive director. In its statement Vukile says Sedise Moseneke comes into the fold to oversee the government-tenanted portfolio and will work together with CEO Laurence Rapp in seeking to grow the fund. He will also have executive responsibility for driving Vukile’s overall transformation strategy.
And by the way, Sedise Moseneke is the first born child of Dikgang Moseneke, the former Pan African Congress activists cum human rights lawyer, turned businessmen, turned deputy chief justice. That makes him a niece to the agile Tiego Moseneke who is listed as the founder of Encha Group. Judging by the number of the Mosenekes in the top structure of the group as listed in its website, Encha is a budding family business empire.