Billion Group teaches Cohort 8 that relationships yield success

Mike Rodel, Chief Operating Officer for Rebosis Property Fund and Billion Group, greeted Stetson Executive MBA students in Cohort 8 to a lavish boardroom Tuesday afternoon. Rodel shared information about his company’s prosperous business in South Africa, specifically regarding the recent merger with Rebosis Property Fund.

The combined company has two main lines of business, the Property Development Group, which is private, and the Rebosis Property Fund, which is traded on the Johannesburg Stock Exchange. The Property Development Group is the development pipeline for Rebosis Property Fund. Rebosis’ business is based in Johannesburg with an eye on the rest of the South African market.

On May 17, 2011, Billion Group merged with Rebosis for $1.66 billion. The rationale for the listing was to “prepare to scale,” explained Rodel. Rebosis Properties officials wanted to be positioned for growth and to be flexible enough to capture sensible opportunities.

Rebosis Properties is the largest and first black-managed, black-owned company on the stock exchange, even though the government approvals have been in place for such an act for more than 16 years. A black company with black ownership gives the company distinctive advantages, such as partnering with other smaller firms that don’t have black representation and hence can’t be a player on their own. By joining Rebosis Properties, smaller companies can participate and have opportunities, too.

Rebosis owns eight properties, which are valued at an estimated at 3.6 billion Rand (about $500 million U.S.). This organizational structure is 60 percent retail and 40 percent office space, in which Rebosis currently holds a 97 percent occupancy rate.

Student Shariq Khan asked Rodel what makes Rebosis Properties appealing to buyers. “We are attractive because our income stream is tied to strong fundamentals.” answered Rodel, “We have a current 8 percent growth rate and are quickly reaching double digits in the next few years with an expectation to stay increasingly strong for a minimum of seven years. We got ahead and now are positioned for great opportunities and success should we stay focused and determined on our core values.”

Rodel said one reason Rebosis’ payments are consistent and efficient is that government and large retail entities occupy the space. Another reason, said Rodel, was the combined experience of the company’s senior leadership, including CEO Sisa Ngebulna. The combined talents and resources of the managers have improved the success of the company’s decision making and innovation.

Rodel said Rebosis is poised to become even more successful with more than $14 billion worth of projects in the pipeline ready to develop and deliver.

Cohort 8 student Larry Flory asked Rodel if the global economic crisis had a detrimental effect on the company’s strategic plans. “Retail was in its final stages,” said Rodel, “and national chains took the burden.” He added that South Africa was fortunate to not have the challenges that the United States faced. The failures that Rebosis experienced were locally based, he said, and would have happened regardless of the economic challenges the world faced.

Securing local talent and professional contractors is not an issue, according to Rodel. Johannesburg offers plenty of available resources, and Rebosis’ leadership can play to the strengths of investors because the company has earned the investors’ trust repeatedly since 2003. “Investors feel comfortable with us,” said Rodel, “and if there is anything we know from our U.S. experiences, it is that relationships, security, comfort, expertise and dedication undoubtedly yield success.”