Investec Property Fund (IPF) has invested in and helped to launch Izandla Property Fund, a broad-based black economic empowered (BBBEE) group.
Investec Property Fund is Izandla’s capital partner and Investec Property will help to manage the company. Izandla’s founders want the company to grow to be a separately listed entity that can compete with other listed property groups within a few years.
This is the first time the Investec stable of companies has launched a BBBEE real estate group. While various property groups and listed real estate investment trusts have black professionals in their management and representation on boards, only a handful of blacks have launched their own property companies. Much of the talent has come from the financial services sector.
Izandla’s majority shareholder is the Entrepreneurship Development Trust (EDT), a broad-based charitable trust. EDT will own 65% of Izandla and IPF will own 35%.
Izandla’s board will include Sthembile Nkabinde, who founded Khulasande Capital.
Nkabinde said she wanted Izandla to grow to a point where it could be listed separately.
"Izandla will start out with a portfolio of assets worth about R600m. These assets will be acquired from IPF. We aim to grow the company to the point where it can be listed separately and compete in the sector. At first however, it will be supported by IPF and Investec Property," she said.
Fani Titi, chairman of the EDT and Investec, said Izandla would support the EDT.
One reason few black businesspeople had tried to list property funds or launched real estate groups was because they struggled to access capital.
"The property sector has been notoriously difficult for many to access due to its large capital requirements. Through the EDT, we can provide the necessary bridge between a powerful business sector and the people in our communities. By investing in strategic interventions to develop entrepreneurs and future leaders through education, the EDT’s work will forge important building blocks for our society and economy," he said.
Nkabinde said: "Izandla Property aims to create value to fund the initiatives of the EDT by accessing quality real estate assets and provide future property clients with a BBBEE partner who will own, manage and develop their property assets to unlock value through the full property value chain."
She said Izandla was more than 30% female owned and was level-two BBBEE compliant.
IPF CEO Nick Riley said more details about the assets that would be included in Izandla would be released in June or July.