Leading black businesses Mpande Holdings and Phatsima Industrial have together bought a 35% stake in JHI Real Estate, giving the property services company the jump on many competitors in the race for empowerment credentials.

With the property empowerment charter expected to be ready by June next year, JHI 's black economic empowerment deal is expected to spur competitors to make meaningful changes in a sector not known for wholehearted transformation.

The rate of empowerment deals struck in the listed commercial property sector and the unlisted property arena has been slow .

JHI announced on Tuesday that it Mpande Holdings and Phatsima Industrial had "signed a landmark empowerment deal that focuses strongly on participatory shareholdings in the booming property sector".

Mpande and Phatsima have taken a 35% stake in JHI in equal shareholdings. The intention is that Mpande, Phatsima and JHI will identify additional empowerment shareholders to grow black shareholding to more than 40% .

Although JHI is keeping mum on how much the deal is worth, it would run into millions of rand as JHI manages a property portfolio of about R8-billion and has five offices in SA, one in Lesotho and one in Maputo, Mozambique.

Phatsima's chairman is Black Like Me founder Herman Mashaba, while Mpande's chairman is businessman Humphrey Khoza.

Khoza, Mashaba and Joe Khoza, CEO of Mpande Holdings, will join the JHI board of directors. Mashaba's alternate director on the JHI board is businesswoman and chartered accountant Thebe Moja.

Angelique de Rauville, MD of listed property portfolio management company Provest, which is part of the Investec property group, says in light of the knowledge that the property charter is going to be ready by the middle of next year, listed property companies and funds will need to take into account the black economic empowerment components of service providers, including their property managers.

De Rauville says the transaction by JHI which offers the services of brokers, project managers, property managers and valuers, among other things will stand it in good stead in respect of having the necessary black economic empowerment credentials to retain existing business and generate new business.

Another of JHI's competitors, property services company Broll, has a 50% black economic empowerment shareholding in the form of Mvelaphanda.

De Rauville says that one of the big challenges for property players is going to be to achieve black economic empowerment at "grassroots level".

"At the moment the black economic empowerment transactions across all industries are having the effect of the rich getting richer," she says.

The listed property sector has also started some empowerment initiatives. In July, Millennium Consolidated Investments Properties, now Shanduka Properties, acquired about 5% of Capital Property Fund.

Shanduka Properties, which is part of the Shanduka group chaired by businessman Cyril Ramaphosa, acquired R50-million of units in Capital Property Fund.

In June, Shanduka Properties also acquired a 50,4% interest in Property Fund Managers, the asset management company of Capital Property Fund also chaired by Ramaphosa .

ApexHi Properties is another listed property fund to have done an empowerment deal recently, leaving Mvelaphanda Holdings with a 25% stake in ApexHi's asset management company.

Business Day