Nick Wilson

Property Correspondent

JHI Real Estate and Gensec yesterday announced a R150m merger deal that will result in the creation of one of the largest property services groups in the country, with assets under management worth about R20bn.

Speaking at a media briefing yesterday, JHI Real Estate chairman Les Weil said the merger would be effective from January 1 and that the new entity would be called JHI.

Weil said the company had conducted research that had indicated that the “equity” in the brand name JHI was “very substantial” because of JHI Real Estate’s 105-year history.

JHI Real Estate MD Bongani Khumalo said the deal would make the new JHI a “serious contender for the number one spot” in the property services industry.

Gensec CEO Marna van der Walt said they saw a “great future in the country” and that they expected “dynamic growth as we increase our client base, offer a wider spread of services and improve on cross-selling in the course of establishing ourselves as the industry leader”.

Weil and Van der Walt also quashed rumours circulated earlier in the media that it was a “takeover” on Gensec’s part and that JHI Real Estate’s financial standing was not strong.

“It’s definitely not a takeover,” said Van der Walt.

“It’s a merger of equals. There is a lot of commonality between the two companies. We believe we have two strong firms and two excited teams.”

She said they had also completed a due diligence exercise and found both companies were financially “sound”.

Weil said that JHI Real Estate was also growing its business significantly and that it had been appointed last week to manage properties worth another R1bn. “Another R1bn of properties will also come on stream in six months,” he said.

At the moment JHI Real Estate has about R8bn worth of assets under management. Gensec has about R12bn under management.

Van der Walt will be CEO of the merged entity. Weil will continue in his position as executive chairman until the middle of next year.

He will then take up the position of nonexecutive chairman, devoting an agreed 30% of his time to strategy, as well as major projects and certain relationships with key clients.

Khumalo will be the nonexecutive deputy chairman of the company.

Weil said that the new company would be at least 51% black owned in “conformance with our philosophy of empowering people”.

Khumalo will retain a shareholding of about 4,5% in the new company.

He said he was “very pleased” with his nonexecutive role as deputy chairman.

“I am in an investment space with a diversified portfolio.

“Property is part of my diversified portfolio of investments.”

Khumalo is also chairman of consortium Gidani, which was recently named the preferred bidder to run the national lottery.

“I will take greater space to supervise and lead the organisations where I have interests, including JHI,” he said.

The new entity’s property services offering includes property management, retail management, valuations and facilities management, among others.