One of the options open to Rebosis CEO Sisa Ngebulana is a tie-up with Delta Property Fund.
But who exactly would Rebosis be marrying? Delta was listed in 2012 by CEO and founder Sandile Nomvete as a specialist fund with a focus on leasing office space.
Like Rebosis, it is black-managed and substantially black-owned. Both funds listed when there was a drive to get a number of well-sized black property companies on the JSE.
As it is, the property sector certainly has a transformation problem. Besides Rebosis and Delta, there are only a handful of black-owned or black-run funds on the bourse, including Dipula Income Fund. While a few investors of colour have tried to list their portfolios since 2011, they’ve battled to attract capital.
When Delta listed, its portfolio was worth R2.1bn, it had 20 properties, and its market value on the JSE was R1.35bn.
Today, Delta has R11.3bn in investments, including more than 100 properties under management. But, like Rebosis, it has felt the sting of an unforgiving market, as its market value has shrunk to R493m.
In part, this is because of high vacancy rates for Delta’s properties, which means rental prices are stagnant.
Unlike Rebosis, which got 100% of its government tenants to sign new leases, Delta has struggled with its state tenants.
But Delta COO Otis Tshabalala believes the backlog of unsigned leases should be cleared this year. The company is holding back some cash, which it would have paid out as dividends, to spend on "incentives" to get tenants to renew leases.
Delta said in November that it expects distributable earnings for the year to end-February 2020 to fall by 12%-15%. It’s a smack in the face for investors, who would expect inflation-beating dividends — even if these are unfortunately becoming rare in the struggling property sector.
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