Billion Group: Laying the foundations for social development

One of the most important aspects of property development is to enhance lives by creating a better environment and platform for economic development.

In March of this year news came through that Nedbank Corporate Property Finance was collaborating with Billion Group on delivering economic development opportunities in the Eastern Cape, which involves the construction of BT Ngebs Mall in Mthatha.

shutterstock_46595533In South Africa, the retail property sector continues to be busy, with expansions of existing shopping centres taking place mostly in outlying areas and former townships, as one might well have read in previous SA-Mag articles over the past few months. 

So the news of the partnership merely built on the existing environment and will see Nedbank providing R1.1 billion in finance to fund the development of the BT Ngebs Mall in Mthatha in the Eastern Cape. 

The funding will enable the Billion Group to complete the third regional shopping mall development by the group in the last year, and will result in the construction of Mthatha’s largest shopping centre of its kind in the region, serving a community of 390,000 existing households. 

Speaking in July 2013, Sisa Ngebulana, CEO of Billion Group, explained why the BT Ngebs Mall project was personally important to him and once again revealed the link between property development and economic development:

“This development is very close to my heart – we are very excited about the opportunities it will unlock in the region.

“At a cost of R1.3 billion, BT Ngebs Mall will not only create thousands of sustainable jobs and entrepreneurial opportunities but our R60 million infrastructure investment will assist in addressing Mthatha’s road, electricity and other infrastructure challenges.

“The development will also create a number of entrepreneurial opportunities within the region, such as potential supply chain agreements, care and maintenance contracts and the provision of a retail platform within the mall for products and services,” he added.

This collaboration underlines the long-standing relationship that the 2 companies have forged over a number of years, as Ken Reynolds, regional executive of Nedbank Corporate Property Finance in Gauteng, stated:

“Given the current economic and market conditions, coupled with a competitive South African property finance sector, the importance of trusting and synergistic relationships between developers and financiers cannot be emphasised enough. It is as a direct result of this kind of relationship that has been nurtured between Billion and Nedbank over the years that this deal could be concluded in a way that adds value to both parties, while also contributing to much needed economic development and social upliftment in the regions and communities in which the mall is being built,” he declared. 

shutterstock_111190532Ngebulana was quick to highlight the key role of partnership as the property development industry helps to facilitate transformation in South Africa: 

“There is still significant scope in South Africa for growth in black-owned property development and investment companies, but this much needed growth will only be fully facilitated through forward thinking partnerships,” he said. 

Nedbank Corporate Property Finance was also involved in a R1.36 billion finance agreement with Billion Property Developments that will see the construction of the new 73,588 m² Forest Hill Shopping Centre in Monavoni, Centurion.

Forest Hill Shopping Centre will be situated on the N14 highway on the western periphery of Tshwane and will include a large regional shopping mall with 175 retail outlets, an 8-cinema complex and an ice rink.

Future phases include a 20,000 square metre value centre, offices, motor showrooms, residential homes and two hotels – all of which will form part of a massive new multi-functional precinct known as Forest Hill City.

The Billion Group has its headquarters in Johannesburg and has enjoyed meteoric growth since its launch in 1999. Today the business is split into a number of divisions:

The Billion Property Group is the property development arm with a particular flare for retail,

The 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.

Additionally, 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.

shutterstock_147595130The next phase for Billion Group is expansion across the Continent and in June of this year came the news that the company is to start building a number of medium-sized malls elsewhere in Africa within the coming months.

This news came just a year after Ngebulana had suggested Billion could in the future look at separately listing its African mall portfolio. At that time Billion was undertaking 12 medium-sized retail shopping centre developments in Angola, Ghana, Nigeria and Uganda. 

In June Ngebulana revealed further insight into the company’s strategy: “Planning in a foreign territory is far more important than rushing to put something in the ground — our planning has been meticulous and vigorous.”

He said the group would be “on the ground in the next 3 to 6 months with a lot of them (the developments).”

Billion Group’s work is laying not only the foundations for its own long-term future but for the enhanced lives of thousands.