New BEE property fund makes waves

Johannesburg - Sitting in the furthest corner of the restaurant, it is clear Sisa Ngebulana is not a man who likes attention.

Alas, the chief executive of property development and investment company, the Billion Group, finds himself squarely in the media spotlight now.

Ngebulana is also a founder of Rebosis, the first black-managed and controlled property fund to be listed on the JSE.

It is hard to make out from his youthful face if he is irritated or angry about reports in the Mail & Guardian linking him to a building lease deal with government which the paper describes as “dodgy”. President Jacob Zuma’s son-in-law was hired as a consultant to allegedly secure state property lease deals.

It does not take long before it becomes clear that he is irritated by the story and, as the face of a listed company, upset about the article’s implications on share price.

Government, he points out, makes up less than a fifth of the Billion Group’s earnings and his company openly donates to all political parties proportional to their representation in the National Assembly. He does not need to curry favour with the state or the governing party.

“People see the end product but don’t know how hard I have had to work to get here. When people see a beautiful, round pebble at the end of the river they don’t know what has happened for it to get there and look like it does,” he says between sips of orange juice.

Ngebulana points to the R1.5bn Hemingways Mall, which opened in East London in 2009 as the jewel of his property development crown.

The 73 000 square metre development along the N2 freeway established him as a phenomenon in the construction industry whom the big players had to contend with.

He says when he bid for the land owned by Tsogo Sun, industry top dogs dismissed him as an upstart out of his depth. To them, his having put together the R520m Mdantsane Mall - which at the time of its opening in 2008 was the second-largest shopping centre in Eastern Cape - was not enough to make the big guns quiver.

“I was not part of a BEE deal and it was a big mall. Competitors had done a deal with Tsogo before. They got a huge surprise when Tsogo gave the site to us.

“It was the first time that a white construction industry had been shaken. It was a pure private sector deal. It had nothing to do with government and I had beaten them at their own game. It was a product of pure hard work and perseverance,” he says. 

Beating competitors

However, the victory was to usher in sleepless nights for Ngebulana. Potential tenants had committed to smaller shopping centres in the city because Tsogo had taken its time deciding to whom to give the deal. Having knocked on doors and cajoled CEOs of retail companies, they eventually turned their backs on their earlier commitments and went with Ngebulana.

Still, that was not the end of the matter. With the Fifa World Cup around the corner, all top construction companies were busy and declined to take up the job because they did not have the spare capacity. The companies’ best teams were working on World Cup-related infrastructure.

“We were not going to have any team working on our project. You could get all the big guys, but their worst teams.”

Having committed to a date for the opening, Ngebulana’s company faced penalties from retailers if they failed to meet deadlines. He says: “Every week we were late could cost up to R60m a week.

“If we fell on our face we were never going to do another development in the country. Besides, retailers were going to nail us with penalties and we were going to go insolvent.”

Then came the eureka moment: create your own construction company and poach your competitors’ best people. Thus the Billion Group construction company was born.

Grinaker’s Lucas Labuschagne joined and was followed by his 17-person team, with the least experienced member boasting 18 years of experience in construction. The mall was completed within the time frame and one of the tenants, Truworths, saw enough to invite him to sit on their board.

Those who know Ngebulana from his early days say they are not surprised he is the big player he is now.

A woman who grew up with him in Mthatha says: “We always thought Sisa took himself too seriously. Even as a child he would wear a suit and tie to church.

“When we came to Joburg, Sisa bought himself a small truck and would remove rubble over weekends and move people’s furniture from one townhouse complex to another. In the evening you would see him at a party, all well dressed and standing against the wall, scanning the room.

“We were all surprised when he bought a house in Sharonlea (an upmarket suburb). Even though we knew he was going far, what was really surprising was the quantum leap he made. He has, however, remained as humble as always,” she says.

But beyond removing rubble and transporting tenants and homeowners from one complex to another, Ngebulana was buying pieces of land and building townhouses and homes to specifications.

It is indeed a quantum leap from Corana village in Mthatha, Eastern Cape to one of the most exclusive suburbs in Joburg - Chartwell in Fourways - to say nothing about having his own private jet.

Ngebulana says: “I practically grew up behind the counter of my grandfather’s general dealer. When other kids were busy playing in the streets I was busy packing bricks and learning about carpentry. Of course, I would play with other kids sometimes but my time was really spent in the brickyards and at the store.”

The lessons learnt at his grandfather’s brickyard came in handy. “Over the weekends I would be there with the guys (builders) laying bricks. We were able to finish our projects within the agreed times.” 

Entrepreneurial spirit

This work ethic also came in handy when he got to the University of Natal (now the University of KwaZulu-Natal) for an LLB degree, followed by a B Juris from the University of Fort Hare, and then an LLM from RAU (now the University of Johannesburg).

His entrepreneurial spirit followed him there. He became a part-time estate agent while studying. “I bought my first car while I was a student from what I earned selling houses,” he says.

The next step, again thanks to his being one of the top students in his class, was to serve his articles at top Cape Town law firm Jan S De Villiers (now part of Werksmans Attorneys) before going on to become a top executive at Eskom and then venturing into the property space.

With business interests in Angola, Nigeria and even Romania adding to the portfolio of smaller business across far-flung areas such as Lydenburg and Ladismith, Ngebulana is not done yet.

The west of Tshwane is set for Forest Hill City, a mixed-use precinct consisting of retail and commercial buildings as well as residential apartments spanning some 68 000 square metres. The development is expected to be completed in 2013 with the residential component in 2016.

Bay West City in Port Elizabeth, with a 90 000 square metre shopping centre as well as office and middle-to-high-density residential developments will be completed in 2013.

Clearly, the pebble downstream is far from being smooth enough yet.

- City Press