The long-standing relationship between Nedbank Corporate Property Finance and leading SA property development and investment group, Billion, is once again delivering economic development opportunities in the Eastern Cape.
The partners recently announced the completion of a deal that will see Nedbank Corporate Property Finance providing R1.1 billion in finance to fund the development of the BT Ngebs Mall in Mthatha in the Eastern Cape.
The funding will enable the Billion Group to complete the third regional shopping mall development by the group in the last year, and will result in the construction of Mthatha’s largest shopping centre of its kind in the region, and will service approximately 390 000 existing households in an area with a current retail undersupply of 477 341 m2. Located just off the freeway on Errol Springs Avenue, the mall offers easy access and egress as well as 1 975 parking bays.
According to Ken Reynolds, regional executive of Nedbank Corporate Property Finance in Gauteng, the successful conclusion of the finance transaction further cements the long-standing partnership that exists between the bank and Billion Group, and demonstrates the value that can be unlocked through close working relationships between financiers and developers in SA.
“Given the current economic and market conditions, coupled with a competitive South African property finance sector, the importance of trusting and synergistic relationships between developers and financiers cannot be emphasised enough. It is as a direct result of this kind of relationship that has been nurtured between Billion and Nedbank over the years that this deal could be concluded in a way that adds value to both parties, while also contributing to much needed economic development and social upliftment in the regions and communities in which the mall is being built,” says Reynolds.
Sisa Ngebulana, CEO of Billion Group, and also points to the value of relationships as key to the development of SA’s property industry, particularly in terms of the transformation that must take place in order to secure its sustainability.
“There is still significant scope in South Africa for growth in black-owned property development and investment companies, but this much needed growth will only be fully facilitated through forward thinking partnerships like the one Billion Group enjoys with Nedbank Corporate Property Finance,” explains Ngebulana.
Reynolds echoes this sentiment, pointing to Billion’s impeccable track record, strong management and proven development and investment acumen as reasons for the bank’s willingness to invest not only in the latest mall development, but recently also its Forest Hill Mall in Centurion, Gauteng, and Bay West Mall in Port Elizabeth. Between them, these three deals bring Nedbank’s total current funding of developments by Billion Group to R3.3 billion, including mezzanine and senior debt facilities.
In explaining the bank’s willingness to invest so heavily in Billion Group’s recent retail development projects, Reynolds points to the relative resurgence in retail investment, particularly in the Eastern Cape, as a key factor.
“Given the retail sector’s potential to drive economic growth, employment and community upliftment, Nedbank is more than happy to get behind an organisation like Billion Group that is not only highly invested in the region, but also serves as an example of what can be achieved through effective and sustainable transformation.”
Construction has already commenced on the 58 808m² BT Ngebs Mall which is located on the busy Errol Spring Avenue in southern Mthatha, directly across the road from the city’s new sports stadium.
Anchor tenant commitments have been secured from Pick n Pay, Shoprite, Edgars and Woolworths, and the mall will offer a tenant mix of 85% nationals, 17% local or line shops, and 2% franchises.
Adds Ngebulana, “BT Ngebs Mall will not only create thousands of sustainable jobs and entrepreneurial opportunities but our R60 million infrastructure investment will assist in addressing Mthatha’s road, electricity and other infrastructure challenges.”
“Mthatha is a key centre of development in the Eastern Cape, and the BT Ngebs Mall has the potential to raise the value this economic hub adds, not just to the immediate surrounding communities, but to the region as a whole,” concludes Reynolds.