Sisa Ngebulana. Picture: FINANCIAL MAIL
Sisa Ngebulana. Picture: FINANCIAL MAIL

Rebosis Property Fund, which reported a half-year loss nearly equal to its R2bn market capitalisation, is scrambling to survive, and plans to sell more assets to pay debts.

Founded by Eastern Cape entrepreneur Sisa Ngebulana, the struggling group has also become the first real estate investment trust in the history of the listed property sector not to pay a dividend for the period.

Rebosis announced on Monday that it was in talks to sell three of its six malls — Mdantsane City Shopping Centre, Bloed Street Mall and Sunnypark Shopping Centre to Vukile Property Fund — for R1.8bn.

Then on Tuesday, Ngebulana, who is also the group’s CEO, said he would look to sell two more malls to raise cash and to reduce the company’s loan-to-value, which had grown from 51.6% at the end of August 2018 to 57.1% at the end of February .  

“We will be left with one mall, one industrial property and many offices. At this point we are not specifying which mall it will be as we need to see what offers we get from buyers. Depending on this we will shift our strategy if need be. So if we are left with Forest Hill, we can embark on developing properties in the Centurion node," he said.

Since October 2018, Rebosis has sold R5.2bn worth of offices

Ngebulana founded Rebosis in 2010 and listed it a year later as the first majority black-owned and managed property company to come to the JSE. Initially, the group was largely a landlord to the government, but Ngebulana aspired to make it a retail-focused group. In 2015, Rebosis bought 62% of New Frontier Properties, a company that owned malls in secondary UK cities, for R1.18bn.

Then, a year later his development company Billion sold  two shopping centres — Centurion’s Forest Hill and Port Elizabeth’s Baywest — to Rebosis. 

Rebosis’s investment in New Frontier Properties has proved to be a bad decision, even though Ngebulana said on Tuesday that the UK was the best region for his offshore strategy at the time.

New Frontier’s assets have lost value in the wake of Brexit uncertainty, and many of its tenants are struggling to survive because of, among other things. increased competition from online shops. 

Rebosis wrote down its UK investment by R2bn in the six months to February and its income from New Frontier fell R96m. Rebosis’s net operating income fell to R140m from R580m. .


Keillen Ndlovu, head of listed property funds at Stanlib, said Rebosis’s swing in strategy made sense, given the difficult circumstances it was in, even if it were selling its retail assets which were superior to its office assets.

“It’s all about keeping the business going at this stage. They have chosen to re-base  by not paying an interim dividend and are restructuring. This is instead of option two which would mean selling all of their assets and winding down the company and option three where they get taken out given their cheap valuation,” he said.

Ngebulana said that in 2020 and 2021 Rebosis’s loan-to-value would be about 30%, its dividend would grow again and the fund would be able to rebuild. 

“We want to continue on our journey as a listed fund. It has been difficult. I am the largest shareholder of Rebosis with about 7% of the shares in issue, and my stake, which was worth about half a billion rand at one point, is now worth a tenth of that. I believe post the election the corrupt government of Jacob Zuma is gone and that Rebosis will be able to do better business with its state tenants,” he said.