A dream came true
A black entrepreneur thought bigger than his world allowed
IN 1987 A SUCCESSFUL property developer in Soweto decided that he wanted to build a shopping mall in the township that would rival the quality of those he’d seen in Johannesburg’s northern suburbs. It would be almost 20 years before his dream became a reality. His name is Mike Nkuna and he’s now one the most successful commercial and retail property developers in South Africa. This is his story...
Nkuna began working in his father’s butchery in 1979 to support his family, but after three years he decided to branch out and establish a small housing construction company at a time when the then government was offering housing subsidies to black residents.
In 1983 Nkuna got his first big break. The municipality in Soweto was looking to sell a plot of land, which they offered to Nkuna. He bought the plot for R100 000 and wanted to develop it. “It wasn’t easy for black people to raise that kind of capital at the time. But Perm Bank came to my rescue and I managed to get some funding,” says Nkuna.
At the same time British Petroleum offered to buy the plot from him to and build a filling station on it. Nkuna declined the offer and instead asked them to help him develop the plot into a small convenience shopping centre that would – among other things – include a BP filling petrol station. BP liked the idea and offered him an interest-free loan to develop the plot.
At the same time Nkuna approached Shell with his idea concerning his plot to see what sort of deal they could offer him. To his amazement Shell bettered BP’s offer. Playing off one against the other, Nkuna returned to BP with Shell’s offer – forcing BP to up their offer.
“But the second time I went back to BP they made sure to make me sign the papers on the spot, because by now they’d cottoned on to my game,” says Nkuna. “But I think it was that experience that made me realise the potential of commercial property and how valuable it was. And from then on my eyes were open.”
Nkuna’s small convenience centre opened in 1986 and became the first organised shopping outlet in Soweto. Previously the township had only scattered corner shops that had mushroomed all over the place. He soon developed similar projects around Soweto.
As a result of his success with his shopping centres Nkuna decided that he would build a mall. He approached OK Bazaars to be his anchor tenant. The company asked Nkuna to conduct a demographic study to explore the viability of such a venture. It revealed that though the demographics of the area were in Giyani, financed by Absa bank.
Then in 2004 Nedbank approached Nkuna and asked him if it they could tap into his rare and invaluable experience in township property development and partner with him to accelerate commercial and retail property development in previously disadvantaged areas. To that end, Masingita Property Investment Holdings (MPIH) was formed. Nkuna held 65% of its equity and Nedbank the remaining 35%.
In 2005 MPIH built Bara Mall and then – in October last year – Nkuna’s long-cherished dream was finally realised when Jabulani Mall opened. “Jabulani was the first full service shopping mall in Soweto and broke many records. It was 45 000 square metres with 110 tenants, a number of which were major national brands like Woolworths, Truworths, Game, Foschini and many more,” says Nkuna. Jabulani is owned jointly by Resilient and MPIH, which hold 55% and 45% respectively.
Since Jabulani, similar property developments are under way, such as the Maponya Mall, currently being developed in Soweto.
However, it’s widely accepted in the industry that Jabulani broke “property develop-
I think it was that experience that made me realise the potential of commercial property and how valuable it
can be. And from then my eyes were open.
fact ideal, the then political instability and the perceptions of the population concerning shopping in Soweto were obstacles.
“The researchers found that black people at the time still believed that anything sold in the townships was inferior to what they could buy in town.
The study predicted it would take about 15 to 20 years before the mindset would be ready to support such a venture. Sure enough, that’s exactly what happened.”
Nkuna then decided to develop shopping centres in rural areas where people were then travelling on average between 150km and 200km to do their shopping.
In 1990 he moved his family to Giyani to be closer to the projects that he was developing there. He developed two shopping centres in ment” ground by being the first mall in a township to include major national brands as anchor tenants and thus set a precedent that others could expand build on. In March this year Masingita opened another mall in Giyani and it’s now in the process of building another one of 15 000 sq m in Diepsloot.
During the course of his career, Nkuna developed seven properties on his own and another four using the MPIH vehicle. And he shows no sign of slowing down. “I’m looking at aligning myself with a major listed property company and partnering with them to build more commercial assets. I’m currently in discussions with one company to acquire a significant stake,” says Nkuna.
Building dreams. Mike Nkuna