Presenter: Lindsay Williams Guest(s): Robinson Ramaite

Sanlam Properties gets together with Sifikile and Simeka Properties to establish Vusani Property Investments - a company that will hold assets totalling R500-million, and is 70% black-owned and controlled. With Robinson Ramaite, non-executive chairman of Vusani Investments

LINDSAY WILLIAMS: Robinson, what is the history of Sifikile and Simeka?

ROBINSON RAMAITE: They are small to medium-sized black economic empowerment companies traditionally involved in IT, employee benefits, and to a small extent resources. About two years ago we started an investment in Braamfontein through a company called Southpoint Properties with about ten buildings, and that led to the current deal with Sanlam Properties.

LINDSAY WILLIAMS: So your entire portfolio is concentrated close to the CBD of Johannesburg and Braamfontein?

ROBINSON RAMAITE: The Southpoint inner city property portfolio yes, but the current portfolio we’ve just acquired from Sanlam is a national portfolio of about 23 properties throughout South Africa. The majority of the properties are in the Gauteng area, but we’ve got quite significant properties in Cape Town and Durban.

LINDSAY WILLIAMS: What are your plans? You’ve got a R500-million property portfolio at the moment, your shareholding is now 30% Sanlam Properties, 70% black-owned and controlled - where do you go from here?

ROBINSON RAMAITE: Our intention is certainly to double the portfolio - to at least over R1-billion worth of properties hopefully over the next 12 to 18 months - so it’s quite aggressive…

LINDSAY WILLIAMS: That doubling - what’s going to be your focus? Is it going to be offices, retail, industrial - where are you going to be looking?

ROBINSON RAMAITE: At the moment is our portfolio is about 55% commercial, 45% retail - we intend to maintain that balance. We’ve got B grade properties in our portfolio - there’s still a lot of value that we need to add to that particular portfolio, so we still have quite a long way to go - but our intention is to maintain that balance.

LINDSAY WILLIAMS: What’s your experience been, particularly in Braamfontein - are you finding there is a regeneration of the inner cities, particularly in Johannesburg?

ROBINSON RAMAITE: Yes, we were quite fortunate in partnering with Wits University early on to cater for the overflow of students that required accommodation - about three of our properties are occupied by students - and generally we think the city is moving in the right direction.

LINDSAY WILLIAMS: Are you finding it difficult to increase the size of your portfolio - simply because the price of properties is sky high compared to a couple of years ago?

ROBINSON RAMAITE: Interestingly enough most of the big property players are going after A grade properties - we think as a relatively small player, although with quite a significant portfolio behind us, we want to target what will generally be termed "turnaround" properties where we can add value, in particular targeting opportunities that will present themselves in the public sector.

LINDSAY WILLIAMS: B grade and C grade properties of course means that you have to spend a lot - how are you going to raise the money? What’s the capital expenditure requirement should you go for these lower tier properties?

ROBINSON RAMAITE: At the current moment Nedbank has advanced to us in excess of R20-million - to focus on refurbishment and repositioning some of our properties in our current portfolio. We have found Nedbank, and Sanlam in particular to be very good partners and I think they understand our intentions. We are hoping to form a good partnership going into the future from a funding point of view.

LINDSAY WILLIAMS: Looking to the future - is it the intention of Vusani to seek a listing on the JSE?

ROBINSON RAMAITE: It’s a little bit too early - we’ve just launched the company today, and we still have a lot of value that we need to add to this portfolio. But yes, hopefully in the next two to three years you will see us in the market - we ideally would want to come to the market when we’ve got a reasonably sized portfolio.

LINDSAY WILLIAMS: That would be R1-billion worth?

ROBINSON RAMAITE: At least in excess of R1-billion.