BEE Empowerment property developers says, "Find yourself an experienced partner"
Thabo Ngcobo, the CEO of Sahluma Properties, and Inframax Developments joint venture partner in their R55 million mixed use The Lighthouse project in the Umhlanga Gateway precinct, has advised other previously disadvantaged entrepreneurs coming into property development to do as he did team up with an experienced and reliable partner who is prepared to coach all along the line.
As a result of the lessons in this project and what Inframax has taught me, we are now in a position to go it alone as an independent developer if a suitable project crops up, said Ngcobo.
Ngcobo came to property of, initially, several years as a physiotherapist at King Edwards Hospital in Durban. He then progressed to top positions in Human Resources Management. He joined the Tongaat-Hullett Group in 1982 and later worked for other companies like Tioxide SA, Glaxo Welcome, the Commission for Conciliation, Mediation and Arbitration, Engen Ltd and, lastly, PetroSA where he was General Manager, Human Resources, and a member of a subsidiary board.
In 2004 Ngcobo set up his own Human Resources General Consultancy, and in partnership with Max Madlingozi, established Sahluma Properties.
Like many others, said Ngcobo, I was attracted by the high profile nature of property and the rewards it seemed to offer, but it was not until I actually became involved with Inframax on The Lighthouse that I began to appreciate just how complicated, drawn out and potentially risky the development process can be.
Ngcobo originally approached Inframax with a view to handling their property sales. However, Paul Mulder, the KZN regional chief for Inframax, had a different view. He suggested that Thabo would learn more about property if he became involved as a partner on the development side and promised to mentor and pass on as much knowledge as he could throughout the project phase.
The Lighthouse kicked off in 2004 and was completed in mid-2007, all its 39 apartments having been sold at launch, at prices between R590 000 to R1,6 million. These values, said Ngcobo, have today increased by some 30%.
Even higher value increases, he said, have occurred in the 13 offices and retail space, sold at R450,000 to R720,000. Here some resales with an 80% increase have been achieved.
What I had not anticipated, said Ngcobo, was how economically destructive delays and hold-ups caused by bureaucratic redtape can be to a project like this. The construction contract and work were relatively straightforward - but getting the necessary approvals and planning permissions could have sunk a less experienced team than Inframax. I was therefore fortunate to have them as partners.
Inframax, he said, had shown how essential it is to persevere and be flexible in these matters - and he has learned a great deal from them. This experience could make another joint venture with Inframax possible if and when a suitable opportunity arises and could, as indicated, lead to Sahluma Properties developing on their own. They are looking, among other things, at diversification into student accommodation around Port Elizabeth.
Mulder said that the relationship had been an extremely pleasant one and that he would welcome working with Ngcobo again on any other future project.