New black-empowered property fund Izandla Property, which is sponsored by Investec Property (IP) and Investec Property Fund (IPF), was officially launched, in Johannesburg, on Thursday.
Izandla Property’s majority shareholder is the Entrepreneurship Development Trust (EDT), a broad-based charitable trust that facilitates broader societal benefits through educational and entrepreneurial initiatives.
Izandla aims to create value to fund the initiatives of the EDT by accessing quality real estate assets and providing future property clients with a broad-based black economic empowerment (BBBEE) partner who will own, manage and develop their property assets to unlock value through the full property value chain.
IP will support Izandla with the required skills, expertise and knowledge, while IPF will serve as Izandla’s capital partner.
Speaking to Engineering News Online at the launch, IPF CE Nick Riley said the creation of Izandla was a significant step in the transformation of the property sector.
“Property in terms of transformation has been an underrepresented asset class and I think it is because of the capital-intensive nature of getting into the property market,” he said.
He added that IP, as a trader, developer and asset manager, had the skills and knowledge base to support Izandla.
“Izandla is focused on transformation and empowerment. At the same time, it allows us as a minority shareholder to participate in opportunities that we wouldn’t ordinarily be able to in terms of our existing empowerment rating of the fund,” he said.
EDT chairperson Fani Titi pointed out that the EDT could provide the necessary bridge between a powerful business sector and communities.
He noted that businesses that are considering property sale and lease-backs, land conversion and property development opportunities should consider Izandla as their property partner, as this will free up their balance sheets and enhance their scorecard credentials through procurement and ownership ratings, while receiving the expertise of the Izandla Property team, "powered by IP and IPF".
“Property is one of the biggest expenses for most businesses. If managed with the right partner, it can unlock more value and long-term returns, starting with using this expense to allow a company to align more closely with the BBBEE scorecard,” Riley said.
Izandla Property will, further, leverage the capital, experience, skills and resources of IP and IPF, with the aim of becoming a self-sustaining entity.
“Our definition of success is when we have assisted in creating a fully fledged, standalone business with a team of skilled staff. IPF will initially look to support Izandla through an asset injection and further capital support, as this will enhance its growth prospects and at the same time allow IPF to participate in new and exciting opportunities not previously accessible,” Riley noted.
He added that the asset injection will be done on a neutral basis for IPF and an announcement in this regard will be made in due course.