Sisa Ngebulana, the founder and executive chairman of the Billion Group Limited and the CEO of Rebosis Property Fund, is passionate about property and feels that more could be done to transform the property industry 20 years into the country’s democracy.
“The Property Charter by default doesn’t have the same teeth as other charters in other sectors of the economy. For argument’s sake, the Mining Charter acted as a much bigger catalyst for broad-based black economic empowerment (BEE) given the procurement levels it prescribed. As a mining house, you had to comply to qualify for new mineral order mining rights. In the property sector, the government doesn’t necessarily have this leverage – the Department of Public Works (DPW) is the only mechanism available at a national level to influence transformation. And even there it is limited to the Incubator Programme applied to a handful of listed funds.”
Ngebulana bemoans the consequences of the directive from Treasury, allowing government departments to grant three-year leases at a 5% per annum rental escalations. “This measure was necessary to clean up the audit process, but it has created endless confusion in the market. Effectively, empowered funds who promoted transformation in terms of the Incubator Programme are being disadvantaged since the assumption is – incorrectly so – that these funds should also settle on three-year tenures at a 5% escalation! I believe it’s an opportunity lost for transformation,” he asserts.
Future for transformation
Asked about what the future holds for black property players, and what the industry should be targeting, Ngebulana says the private sector and government can do a lot more to address the slow pace of transformation and empowerment of the previously disadvantaged people.
“The recently established Government’s Property Management Trading Entity is one such opportunity if it is done right. One opportunity is to empower staff that has shown the ability to manage assets through seed funding. This will nurture the next generation of entrepreneurs.”
“Similarly, bigger listed property companies can be real catalysts for empowerment, as is the case in the mining sector. If there was any seriousness about addressing transformation, there would’ve been many more empowered players in property, not just in the listed space. “What concerns me more though is that this option has never been explored by the private sector either. Especially the large property companies are in a much better position to structure their investment through preference shares or a convertible instrument.”
Ngebulana pinpoints the chief reason for a lack of transformation in the property sector. “The problem is that in the overall property sector, there is no regulatory body or ministry that can monitor and enforce the process. This is a major reason for the slow pace and lack of commitment to transformation. The DPW can only enforce policy within the ambit of government-leased properties – and this doesn’t even makeup about 10% of the overall sector.
“If ownership and transformation was a genuine concern, as it has been in mining, the large corporations would have seized the opportunity to create more entrepreneurs in the sector,” concludes Ngebulana.
Beacon of hope
Ngebulana is one of the few icons in the property sector, someone who pulled himself by his bootstraps to sit at the top echelons of the property industry. It was a long journey. The seeds of success were planted in his childhood. He was born and bred in Mthatha in the Eastern Cape. His grandfather Buchanan Tandi (BT) Ngebulana was a strong leader who played an instrumental role in Sisa’s formative years. Interestingly, Ngebulana Senior represented Eastern Province in rugby and played for the Springboks in the 1940s.
“My greatest inspiration is my grandfather. He stands as an icon for the whole family and the broader community where we grew up,” says Ngebulana. learning and working in the shop and at the brickfields in his formative years, during which time his grandfather mentored him in fundamental business skills. He inherited his grandfather’s strong morals and work ethics. The general dealer became the central point of contact between the villagers and family members working in the cities, who would send money to the village to build their families home. “We grew up behind the counter,” he remembers. “We had to be up at 4 am for bakery deliveries before school. There was hardly time to play. When we had a gap over weekends, we played football. Then people would start streaming into the shop and you ran back to help.”
He matriculated at St John’s College in Mthatha, and then attended Fort Hare University in Eastern Cape to study law. He then attended the University of Natal (now UKZN) and enrolled as an estate agent with Realty Elk to finance his studies and living expenses. Ngebulana also started speculating with property and sold properties for cash. He sold about 28 homes and became one of the best local agents in Maritzburg. “I realised early on that the bathroom and kitchen would play a deciding role when families settled on a new home. So I convinced the developer not to finish these rooms, but to rather provide various finishing options as far as tiles, paint and fixtures were concerned,” he says. “This certainly proved useful in the end, as I made enough money to buy a BMW!”
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 on an articled clerk’s salary, he bought a tow bar and launched a furniture removal business, moving furniture over the weekends in Green Point and Bloubergstrand.
After qualifying as a commercial lawyer, Ngebulana moved to Johannesburg and set up a fulltime transport business, Blue Truck Rentals. But the stressful pace of the business took a toll on his health and he decided to accept a position as a legal advisor, specialising in finance and Treasury derivatives and transactions, at Eskom. During his five-year stint at Eskom, Ngebulana was part of the first finance team enabling the euro rand bond issue. He spent 18 months in structured finance and learned the tricks of the trade. The rest is history.
