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Vukile’s R700m deal to empower Mbako Property Fund

Deal will also see Vukile become an exclusively shopping centre-focused property counter.
Sindi Mabaso-Koyana, AWCA Investment Holdings executive chair (centre), with Vukile Property Fund CEO Laurence Rapp (right) and RMB's Sashen Nadioo (left). The group has secured a R700m property portfolio from Vukile as part of a landmark empowerment deal. Image: Supplied

Already regarded as one of the listed property sector’s forerunners on the transformation front in SA, Vukile Property has announced another empowerment deal that will see a new black women-owned and -managed property group enter the industry.

Vukile has sold a portfolio of its last remaining non-retail properties to unlisted upstart Mbako Property Fund, as part of a landmark R700-million deal, financially backed by RMB. Mbako, which is led by AWCA Investment Holdings (AIH) as its founding shareholder, will be managed by a new joint venture between AIH and Vukile.

Read: Property sector under pressure to transform

The sizeable Mbako seed portfolio includes nine office and industrial properties, eight in the country’s commercial hub of Gauteng and one in Pinetown, KwaZulu-Natal. The biggest property is Allandale Industrial in Midrand, stretching over 21 300m2 of gross lettable area on a 12-hectare site with 60 tenants.

Laurence Rapp, Vukile’s CEO said the “innovative deal” realises Vukile’s strategic vision of a directly-held portfolio comprised exclusively of retail property in South Africa and more significantly, is positive for economic and gender transformation.

“In Mbako’s hands, these assets are a platform for growth and wealth creation.”

Questioned by Moneyweb about the impact of the deal on Vukile’s BEE credentials, Rapp said: “We are currently rated at level three BEE. The deal will certainly be positive for our rating, but it’s more than just what it does for our scorecard. It’s another real commitment by Vukile to transform the sector through the conceptualisation and formation of a black women’s property asset management company.”

Sindi Mabaso-Koyana is executive chairperson of AIH, which was founded and funded in 2008 by black female Chartered Accountants. It has 54 shareholders and African Women Charted Accountants (AWCA), a 1 500-member non-profit organisation, as a 10% beneficiary.

“AIH is turning its attention to accelerating transformation in the property sector through Mbako Property Fund,” says Mabaso-Koyana.

Read: Capital flight: SA property companies invest billions more offshore

While AIH has made around 14 investments to date, she tells Moneyweb the deal with Vukile represents the holding group’s first foray into the commercial property sector.

“This is a significant development for us as AIH, as we have been looking to invest in the SA property sector for a while,” notes Mabaso-Koyana, adding that Vukile, has extensive experience in the industry, and is a known supporter of transformation.

“The deal with Vukile gives us a foot into SA’s massive commercial property sector. We aim to grow Mbako Property Fund with further acquisitions in the pipeline. While it is an unlisted fund currently, in the future we may list it on the JSE…. We believe Mbako is coming to market at the right time to attract funding and deal flow to take advantage of the depressed listed property market with opportunistic and value-add transactions,” she adds

As a privately-held holding group, she did not want to reveal AIH’s total investments to date. However, she says that the Vukile deal “is one of the group’s largest” transactions. Some of AIH’s other empowerment deals include stakes in unlisted insurance group Hollard and fuel logistics company Reef Tankers.

Vukile, which has a R35 billion property portfolio in South Africa, Spain and the UK, has a 15-year unbroken track record of distribution growth. The group is set to release its half-year results next week.

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