Andile Mazwai on returning to CEO desk and growing wealth the old-fashioned way

Andile Mazwai, the former CEO of stockbroking institution BJM (which he sold in parts to Rencap and FNB in 2010) has been quietly serving on the board of black-owned property group Rebosis since 2011. Now he is out in front with his appointment this week as CEO, while founder Sisa Ngebulana moves into the role of nonexecutive deputy chairman. Business Day asked Mazwai why he would head back into the stress of executive management.

The answer is because it is nice to belong to something bigger than oneself and the Rebosis story is a big one.

The market has never really fallen in love with Rebosis – you were trading at similar levels five years ago despite huge growth in your portfolio. Why is this?

We’ve been growing at anywhere between 7% and 11% over that period so we’d like to think we’ve put in the performance — that whatever promises we made we delivered upon. I think what has got the market a little bit confused over the years is how we got there. We started as a retail fund, we became a govistock (government as a tenant), we then went into Europe, now we’re back into retail and we are also in Govi and maybe the soundbite may not have been as

easy for the market to digest as we thought it would be, but I’m just guessing.

Is it problematic to be a few things – retail, government tenants, UK malls?

Around the world if you are a specialist you get a better rating. For whatever reason the market does not rate government-tenanted property well at all. Whether they perceive government to be risky, we think not because Treasury pays our rent and we receive it. But the market says no, which is why we have gone back to where we started [as] a retail fund, therefore once we are done with the selling of some of our government-tenanted assets, two-thirds of our value ought to then be in retail.

How much of the government portfolio do you want to sell off?

We’ve got about R1.5bn of stock and it’s purely to finance the acquisition of the retail assets. So with our gearing in SA at about 41%, we want to bring down debt level to between 30% and 35%. But retail is tough and

surely set to get tougher?

Imagine you’ve got a commercial building: the day your tenant leaves, you’ve got a problem. But if you’ve got a solid new mall you should never be in the position that everybody vacates your mall. So retail is what we think we’re good at – if you look at [our] assets we think they’re very good.

Aren’t reversions going to start getting ugly, especially for anyone outside government?

I think the Stuttafords moment kind of shifted the balance of negotiating power in favour of tenants. Edgars, as well, does make it harder for landlords. But it doesn’t take the appeal away and a superregional mall is still a superregional mall. Reversions or not, you are still going to have good tenants and good locations. What have you and your team been tasked with?

Our five-year plan is to continue to grow. What we do really enjoy is the fact that we have the pipeline of development [of retail assets] coming from Billion [former CEO Sisa Ngebulana’s development group], so we’ve got a right of first refusal.

As you step back into a CEO role, do you have any lessons to share as a prominent black businessman?

This is probably going to sound very uninspired but the answer is: do it the old-fashioned way. Which is: small steps

and slowly. In my experience you get guys who want to start out at the top; their first project must be that big project. Conquer the small things and then move on to bigger things. I just see many people want to make their money in one deal, they want to make their name in one transaction. It doesn’t work that way. How do you see “radical economic transformation”?

(Laughs) For me, radical economic transformation means start in your own home, with your own budget. If you are spending more than you earn and your debt is financing your lifestyle, you are not giving yourself a chance of becoming wealthy. People need to look within their own budgets before they look at government policies or what somebody else can do for them. I did it slowly! Everywhere I’ve gotten it was step by step. Look, what the deputy president was saying is that radical economic transformation simply means the policies that are in place must now take traction. So it’s not really a step change. Again, I just think that too many people are waiting for somebody to do something for them as though they can’t do something for themselves. And please, not everybody has what they need – everybody could do with a bit of help, but they’ve got to start doing something for themselves as well.