No room at top in listed property
Rapidly growing sector still led by entrenched old hands
● It could be a while before there is a widespread shake-up in the entrenched leadership of the listed property sector. Those who have their sights on senior jobs might be best advised to strike off on their own.
Many of the JSE-listed funds in the commercial property sector are still led by their founders and a number of their executives have been in place for more than a decade.
While some fund managers argue that it is better to have experienced executives who can bring surety to investors, they admit fresh blood has to enter the sector as it grows and develops. It just may take a few years as many of the experienced executives aren’t even close to retirement age.
Listed property is also a young sector in South Africa, having been formalised at the beginning of the millennium. Some CEOs have had only five to 10 years to find and groom the next generation of leaders.
Likewise, many property executives have remained at funds since the early days of listed property and have been rewarded by the value explosion that the sector has experienced in the past decade.
At the end of 2003 the sector was worth R61-billion. It is now worth about R703-billion, which includes companies that operate offshore but are listed in South Africa.
South African property companies have exposure to about 30 other countries.
The entrenched leadership in the sector includes Norbert Sasse, 53, and Estienne de Klerk, 49, who have been the leaders of the largest listed real estate group on the JSE, Growthpoint Properties, since the early 2000s.
Pieter Prinsloo, 52, has been in charge of Hyprop Investments for two periods, from 2002 to 2009 and from 2011 to the present. The blue-chip shopping centre owner’s financial director, Laurence Cohen, has also worked at the company for almost 15 years. He announced this week he would leave in August.
Meanwhile, Laurence Rapp, 48, has been CEO of Vukile Property Fund since 2011.
Redefine Properties was the last major property group to bring in a new CEO. Andrew Konig — who was the group’s financial director — took over the CEO role in August 2014 when founder Marc Wainer became executive chairman.
Many South African property funds say they have succession plans in place and that they are grooming talent — but we won’t see new CEOs overnight, says Garreth Elston, a research analyst at Golden Section Capital.
There are a couple of young CEOs who have found their way into the sector. These include Mark Kaplan at Arrowhead Properties, who replaced Gerald Leissner following his death at the end of 2016, and Nick Riley who heads Investec Property Fund. Both are in their mid-30s.
Listed property also needs to transform. But this may mean that more black investors need to list property funds themselves instead of waiting to climb the corporate ladder.
Nkuli Bogopa, the president of the South African Institute of Black Property Practitioners (SAIBPP), said previously that while there were numerous black professionals in roles within listed property funds, including managerial ones, their presence was lacking at an executive level.
Keillen Ndlovu, head of listed property funds at Stanlib, said the listed sector was facing a lack of skills.
“The skills shortage continues to be a big challenge for the property sector in general. There is a need to train, groom and retain young people across all sectors from asset management to research, property management, listed property companies as well as banks’ property finance departments. Otherwise the property sector will continue to compete for limited talent.”
Less than 10% of JSE-listed real estate funds have a black CEO — there are only four in the sector.
They are Nosiphiwo Balfour at Texton Property Fund, Izak Petersen at Dipula Income Fund, Sandile Nomvete at Delta Property Fund and recently Sisa Ngebulana returned to Rebosis Property Fund as acting CEO.
Ngebulana founded Rebosis in 2010 and listed it in May 2011. He has replaced Andile Mazwai, who suddenly resigned last week after he had clashed with Rebosis’s board.
Ngebulana had hand-picked Mazwai to be his successor. Some analysts now hope that Mazwai will take the reins at another property fund.
Bogopa said listed property companies often had to compete for black talent, who may rather seek careers at banks and in corporate finance.
Mazwai himself comes from a finance background, having headed up stockbroking firm Barnard Jacobs Mellet before it was sold to FNB in 2010. He set up Mazwai Securities and was CEO of the National Stokvel Association.
Mazwai, who is in his mid-40s, has been tight-lipped about his next role.
“I don’t have any plans yet but I’m open to many opportunities,” he said on the day of his resignation.
“The company is bigger than the individual, and while I didn’t want things to turn out this way, I am prepared to step aside,” he said.
Ngebulana, 52, says he is in no rush to find a full-time CEO for Rebosis.
Perhaps this time he and the board need to select his successor together. Mazwai had been chosen ahead of internal Rebosis staff, including former chief financial officer, Kameel Keshav.
Keshav, who is now CEO of Inkunzi Student Accommodation Fund, recently pulled the plug on the listing of the fund, which would have been the first student housing company to come to market.
Keshav and business partner, Owen Nkomo, couldn’t raise the R800-million they needed to bring R1.4-billion in assets to the listing. Asked if he would consider replacing Ngebulana, he said: “I haven’t even thought about it. There has not been any approach.”
We won’t see new CEOs overnight Garreth Elston Analyst at Golden Section Capital The skills shortage continues to be a big challenge
Keillen Ndlovu Head of listed property funds at Stanlib