Mvelaphanda takes controlling stake in Broll

Posted On Thursday, 01 August 2002 02:00 Published by
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Deal may set new parameters for black empowerment in the property industry
A deal making Mvelaphanda Holdings a 50% equity partner in Broll Property Group last week could signal a new wave of black empowerment in the property industry.

The deal gave to an empowerment partner a significant stake in the controlling body of a property operating business. The industry norm has been to create separate entities jointly owned by established property players and black empowerment partners.

Colliers Siza, a joint venture between Colliers RMS and a consortium of empowerment groups, is a perfect example of the first wave of empowerment deals in the property industry. These were punted as offering hands-on entrepreneurial experience to black empowerment partners, not just passive ownership. Many of these deals delivered ownership to start-up operations that lacked earnings records.

These, however, have tended to fizzle out in the longer term.

The Broll deal has delivered control and ownership of an established brand to a black empowerment company. 'This investment in Broll presents another opportunity for black empowerment groups to showcase their skills,' says Mvelaphanda executive chairman Jackie Mphafudi, who has taken an executive position at Broll.

Chaired by former politician Tokyo Sexwale, Mvelaphanda has a diverse shareholder base, including Women's Development Bank Investment Holding, Makana Investment, Mabutho Investment, and the Steve Biko Foundation.

It is not expected to be a passive equity partner in Broll, commanding other interests that could add value to Broll's business operations. The company made its debut in the property industry through Tyger Falls, a R500m on-plan development in Cape Town. It operates through a division called MvelaProp, a joint venture with Johannesburg Consolidated Investment Company, Newport Property Group and Bos & Punt.

Mvelaphanda's political credentials could help Broll secure public sector business.

Broll executive chairman Jonathan Broll says: 'We are delighted to welcome Mvelaphanda as partners in our quest to grow our role as a contributor to the broad economic fabric of SA.

'We believe Mvelaphanda to be a genuine black economic empowerment partner with a spread of shareholding that represents financial stability and critical mass.'

He expects the property industry to undergo radical changes as local property owners, public and private, realise property is an asset class in itself. This will mean more business for companies like Broll as property owners increasingly surrender management of their property assets to people with expertise.

Business Day

Publisher: Business Day
Source: Business Day

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