The forces and ambitions behind the Ascension fight

A fascinating three way corporate action has ensued on the JSE listed property sector involving three black controlled property funds, Rebosis, Delta and Ascension. The action exploded into the public arena on Monday appearing to be more of battle between Sisa Ngebulana’s Rebosis Property Fund and Sandile Nomvete’s Delta Property Fund. The two seem to be racing to take control of Shaun Rai’s Ascension Properties. The action involves interesting personalities on all three sides. Here we map the personalities and their corporate ambitions.

Rebosis Property Fund

Rebosis CEO Sisa Ngebulana; He is making BEE waves in the commercial property market

Rebosis Property Fund CEO Sisa Ngebulana

Rebosis is positioned as a pioneer in the movement of emerging black controlled commercial property funds into the JSE. Under the guidance of widely respected entrepreneur Sisa Ngebulana, Rebosis was the first black controlled property fund to list on the JSE in 2011. The company sprung out of the Billion Group, Ngebulana’s primary property investment venture. The Billion Group was established in the early 2000 and quickly established critical mass via acquisition of old office blocks in Pretoria which were targeted for the government tenanting market. The Billion Group also ventured into shopping centre development and has brought onto the market the Hemingsway Mall in East London and Mdantsane Mall. These two properties pillared the Rebosis listing in 2011. That base plus a couple of office buildings was used to expand the Rebosis portfolio which is now valued at R5.2 billion. Meanwhile the Billion Group, which manages Rebosis is undertaking further retail developments. These include the R1.3bn retail development, the BT Ngebs Mall in Mthatha. There is also underdevelopment the R2bn Bay West Mall in Port Elizabeth and the R1.3 billion  Forest Hill Shopping Centre in Centurion, Gauteng. Ngebulana has also expressed firm intensions to take his retail development expertise into the north of Limpopo. Should Rebosis succeed in merging with Ascension, it will boost its asset base to more than R8bn. This will give it sufficient critical mass to raise capital for further expansion while remaining a black controlled property fund that can play in the public sector leasing market.

Delta Property Fund

Sandile Nomvete 3

Delta Property Fund CEO Sandile Nomvete

Delta was listed on the JSE property sector towards the end of 2012 and brought to the market an office portfolio valued around R2.1bn. Delta was shaped by the ventures of a group of black entrepreneurs. The group led by Sandile Nomvete entered the market in the mid to late 1990’s and via the property management door. They operated an entity called Motseng Property Services which developed to scoop large property management contracts. Properties under management include the Pavilion Shopping Centre in Durban. From this base the Motseng team including Nomvete, JP Magwaza, Ipeleng Mkhari , Bruce Zungu and Jabu Mriga ventured into property investment. Their BEE credentials allowed them to capture a significant portion of the government tenanting market and they have positioned Delta as a specialist in this market. Financial results for the six months ended August 2013 show the asset base had grown to R4.8 billion with the public sector exposure still dominating. Delta managed by a third party asset manager, MIP Property Asset Management, a 100% black owned entity. A merger with Ascension will boost Delta’s portfolio to about R7.9 billion.  Nomvete has justified the pursuit for Ascension as such: There are excellent synergies between the portfolios of the two firms.  “Both have excellent BEE credentials and both are chiefly invested in office buildings with long-term government leases in key economic locations. Delta is in an excellent position, with a strong management team, to take Ascension’s assets forward.”

Ascension Properties

Ascension Properties was established in 2006 by mainly Cape based entrepreneurs and was listed on the JSE in 2012. These entrepreneurs included Shaun Rai, a chartered accountant with extensive corporate experience and in the art of empowerment. Rai came from Cape Empowerment Limited,

Ascension founding shareholder and director Shaun Rai

Ascension founding shareholder and director Shaun Rai

the diversified investment holding company which played in the BEE space. A couple of other founding directors came from Cape Empowerment

including Jeremy de Villiers and Henry Henry Dednam. The company developed to draw in other high profiled black executives including Ashraf Mohamed, the CA who came from Regiment Capital to take up the post of CEO at Ascension Capital. The fund is chaired by Andrew Nissen and also features in its board Frederick Arendse, Mervyn Burton and Haroon Takolia. Ascension came to the JSE with a property portfolio valued at R524 million and had back then a pipeline of acquisitions valued at R524 million. The portfolio has grown with an expressed ambition to focus on government tenanted commercial office buildings. This is enabled by the 100% black owned asset management company Ascension Property Management with 35% due to Shaun Rai. Ascension property portfolio has grown to be valued at about R3.2bn. While the prevailing merge tiff makes Ascension look like a trophy; that may not be the case.  Ascension’s intensions are yet to be clearly spelt out in the prevailing noise.

  • It is disappointing to see BBBEE companies going for each others throats in order to make more money.This can be equated to fighting over left overs from the boss`s dinner table given the fact that the bulk of the economy is still embedded in the White corporate world. What Black owned companies are fighting over is a pittance when compared to what is still in the hands of the established White owned companies. Black company owners should rather unite in an effort to create economic equity between Black and White companies as opposed to fighting among themselves. It is premature for Black companies to be involved in hostile takeovers against other Black owned companies given the fact that Blacks still have a mountain to climb in terms of leveling the economic playing field. The Government needs all the support it can get from the previously economically disadvantaged groups in it`s efforts to ensure that progress is made in creating a significant number of Black owned businesses thereby creating wealth which culminates in financial independence. This hostility will only serve to entrench white owned companies dominance over the small number of Black owned companies.

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