Billion Group: Making a positive mark on the landscape

Centurion is poised for the exciting development of a new 72,000 square metre mixed-used commercial centre, scheduled to open in April 2014. The project is the latest venture for the Billion Group, a property development and investment business which has quickly made its mark in delivering projects that create jobs and economic prosperity.

The company has made its name in retail, commercial and mixed-use developments located across South Africa, typically building regional shopping centres, landmark office towers and golf course developments in double quick time, having only formed in 1999.

The Billion Group has its headquarters in Johannesburg and has enjoyed meteoric growth. Today the business is split into a number of divisions:

The Billion Property Group is involved in property development, with a particular focus on retail. It houses all Development and Project Teams and is tasked with delivering a development from conception to conclusion.

Aerial View 1 v2The Phomella Property Fund owns the commercial and retail properties directly. The retail properties, during the design and construction phase – which can be time-consuming, are held under separate entities, only being transferred to Phomella once construction is completed. The management of the properties within Phomella is either then outsourced to independent service providers or performed in-house under Billion Property Services.

The Group also runs a business called Billion Property Services which is responsible for asset management, property management and facilities management. This side of the business naturally links in with the completed commercial and retail projects.

The final entity within the Group is Billion Residential, an organisation which was set up to oversee the development of each residential project.

The company has flourished under the leadership of Sisa Ngebulana, Executive Chairman – but for him, the journey to today’s strong position has been anything but straightforward. Having moved on from working as a lawyer for Eskom, to working with coal, the young entrepreneur encountered enormous challenges which resulted in financial debts with the banks. He studied finances before eventually finding his forte with property development.

Along the way Ngebulana also endured family challenges and suffered from poor health. But as the old saying goes, what doesn’t kill you makes you stronger – and in Ngebulana’s case, his business acumen has gone from strength to strength, as he recently reflected, speaking on ABN Digital’s ‘Entrepreneurial Edge’ programme:

“I started doing spec building to pay bank debts and started off with one plot of land I decided to focus on and I was able to develop concepts and sell off-plan, four units in Hyde Park. I hustled the banks to give me an overdraft to live on until I was able to finish the project and was able to get more clusters of residential properties in Hyde Park and Bryanston.

“I started off in residential properties and beyond that started to invest in commercial properties – in CPDs and focussed on Pretoria CPDs because the insurance companies were moving out of CPDs and the yields they were selling at were around the 25 per cent mark – today you would struggle to find 11 per cent. So with a lot of equity you could make deals work and I was blessed to be there at the right time and at the right place.

“I bought a few high rise buildings and then focussed on retail, developing regional shopping malls. We accumulated a lot of assets and consolidated those in 2010 into Rebosis – a name made up of family names – and we listed on the Main JSE Board on 17th May and we have delivered to focus since we’ve listed.”

Rebosis Property Fund was established by the Billion Group in 2010, and the company became the first black-managed and substantially black-held property fund to be listed on the Johannesburg Stock Exchange.

Rebosis came to life after Ngebulana had already developed the Hemingways Mall and Mdantsane City – both successful shopping centers in East London, in 2009 and 2008 respectively. He bundled these developments together with office properties and listed them on the JSE under Rebosis Property Fund. Rebosis has since grown its asset base from R 2 billion at listing two years ago to a current mark closer to R 5 billion.

Having gradually built up the Billion Group’s portfolio of office and retail properties, through a combination of acquisitions and property developments, from the initial acquisition of the Liberty Life building in 2003 to the its impressive current portfolio of high grade properties, Ngebulana has now turned his attentions to the R1.6 billion Forest Hill City project in Centurion.

The new project has been designed as a mixed development that will ultimately combine office, retail and residential space. The precinct is anchored by Forest Hill Mall which will boast gross lettable area of 72,000 square metres, making it the largest mall in the area.

It is conceivable that the Billion Group will eventually inject the Forest Hill City Development into the Rebosis Property Fund which will further boost the rankings of the fund on the JSE.

Meanwhile, the company also recently announced plans to develop another shopping centre in the Eastern Cape in the form of a R 1.75 billion development called Bay West City in Port Elizabeth. The Group’s current development pipeline adds to a reported total value of R7.1 billion.

Describing the Forest Hill project, Ngebulana said the development “epitomises urban living – where people eat, live and play in a safe and convenient environment. The mall has excellent access and egress and is located on an off-ramp in South Africa’s fastest growing residential node.”

Forest Hill has excellent transport links, situated on a major interchange, spanning 1 kilometre along the N14 highway and 300 metres along the R55 in Monavoni, Centurion. This intersection connects Midrand, Centurion, Sandton, Johannesburg, Krugersdorp and Pretoria.

Upon completion, it is projected that the Mall will service the current 112,500 households in the primary catchment area, which is likely to have increased to 160,000 households by 2014.

“We have received over 80 per cent commitments from leading international and South African brands, including Checkers Hyper, House and Home, Woolworths, Truworths, Edgars, Ster Kinekor, Foschini Group, Pick and Pay, Pepkor and Mr Price Group brands. Banks, food and entertainment franchises are also well represented and the mall will boast and ice rink.” Ngebulana stated.

The project received a major boost with Nedbank Corporate Property Finance providing R 1.36 billion of funding for the development.

Of course attracting financing in the current climate can prove a challenge in itself, however Ken Reynolds, Regional Executive of Nedbank Corporate Property Finance in Gauteng, said that Nedbank made the decision to provide the required funding based on its confidence in both the developer and the medium- to long-term future of the retail property sector in South Africa:

“Ngebulana boasts an enviable property development track record, which includes the successful Hemingway Shopping Centre in East London and vast property investment experience, including the 2011 listing of the Rebosis Property Fund. He shares Nedbank’s confidence in the long-term potential of the country’s retail property market which has stood up very well to the financial challenges that have had a negative impact on other commercial property sectors in recent months,” he commented.

Such projects are not necessarily going to reach their full potential today – rather they will leave a lasting legacy. The issue of legacy is one close to Ngebulana’s own heart, his companies are active in numerous corporate social responsibility programmes and offer bursaries to South African pupils, with a view to creating entrepreneurs and leaders for the future.

Reflecting on his achievements during his interview with Entrepreneurial Edge, his priorities were very clear:

“If I look at what we’ve achieved in the property space, it’s not about the money – 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.”