Founder to revitalise Rebosis

• Ngebulana returns to improve operations at fund

Sisa Ngebulana, founder of Rebosis, SA’s most successful black-owned and managed property fund, says he has returned to put the company back in a position where it can acquire value adding assets and compete with other retail funds. /

Sisa Ngebulana, the founder of Rebosis, SA’s most successful black-owned and managed property fund, says he has returned to put the company back in a position where it can acquire value-adding assets and compete with other retail funds.

Ngebulana who was back at the helm after the sudden departure of his successor, Andile Mazwai, in April, said that Rebosis needed its shares to rerate before it could even consider buying new assets.

He spoke at the release of financial results for the six months to February. Rebosis declared a total interim dividend of 63.23c per ordinary share, up 4% on the comparative half-year distribution per ordinary share results for the reporting period, in line with its forecast. This was, however, at the lower end of expectations and was barely above consumer price inflation, which was 3.8% in March.

“It’s a tough market … but I’m happy with what we have achieved in this period. I am reiterating that our strategy is to be a retail-focused fund that provides reliable returns to investors,” said Ngebulana.

He returned to the company he listed in 2011, as the first majority black-owned and managed property fund on the JSE with about R3.6bn in assets.

“My team and I will spend the next few months improving the operations at Rebosis and getting the most out of our assets before we can make any distinct changes to the fund. This would include buying new shopping centres which added long-term value to our earnings.”

He said the fund’s share price had been under pressure and that Rebosis was trading at one of the highest yields in SA’s listed property sector. A report by Catalyst Fund Managers says Rebosis’ historic rolled yield was 17.5% at the end of April.

Rebosis gained 3.13% on Tuesday, closing at R8.25.

The stock has lost 16.5% so far in 2018.

At the end of February, Rebosis, a mid-capitalisation property company, owned a portfolio worth R18.9bn. This included six shopping centres worth R8.77bn, or 46% of the portfolio, 42 office properties worth R10bn, or 53% of the portfolio and an industrial asset worth R170m, just under 1% of the portfolio.

Ngebulana said that within a few years he wanted the fund’s portfolio to be 80% retail and 20% office. This process would gain momentum during the rest of the August financial year as Rebosis had found buyers for some of its offices.

The retail assets contributed 40% of the company’s net income, the offices contributed 59% and the industrial asset 1%, during the reporting period.

Many of the fund’s offices are rented out to government agencies, which provide a positive sovereign underpin for the fund’s overall investment case.

Its retail and office portfolio delivered net property income growth of 6.8%.

Like-for-like growth in the retail portfolio was 7.1% year on year, 5.5% for the commercial office portfolio and 7% for the industrial assets.

“The results were in line with our expectations, but some were expecting negative growth so while 4% isn’t an exciting number, it’s better than some expected. At a near 17% income yield and with a solid chance of producing positive, albeit single- digit growth, I believe Rebosis offers value,” said Nedbank Corporate Investment Bank real estate analyst Len van Niekerk.