MASTER INVESTOR: Ben Kodisang The Property Veteran

0
1962

Property relationships and people is vital for success

Ben Kodisang has served in the corporate property industry for almost 2 decades already and can easily be called a veteran in the corporate property game. Ben who originally was brought up in Johannesburg after leaving St. Stithian’s College studied at the University of Kwazulu-Natal where he acquired a Bachelor of Commerce (BComm) degree before studying his Hons (B.Compt) at UNISA, and thereafter qualifying as a Chartered Accountant at Ernst and Young.

Ben’s career started at Liberty Asset management in 1996 as a Senior Manager where he was an industrial analyst in the asset management department. In 1998 he turned entrepreneur where he co-founded and set up Prodigy Asset Management, which was a boutique investment company that focused on growth sectors of the economy as its investment philosophy. In 2000 he was appointed Chief Investment Officer of African Harvest Managers who focused on asset management for various companies.

ABOUT BEN

Age: 46
Marital status: Married with a daughter aged 16
What are you reading at the moment? My Own Liberator – Dikgang Moseneke
What is your life motto? Live inspired and Care

In 2002 his 10-year stint started at Old Mutual starting as General Manager of Old Mutual Employee Benefits Investment Services division from 2002 to 2004. In late 2004 his focus on property started as MD of Old Mutual Properties Limited a division focused on acquiring and managing their own commercial property portfolio such as major shopping centres, industrial and office assets including prize assets such Cavendish Square, Menlyn Shopping Centre, Gateway, and Portside building in Cape Town CBD. In 2006 Old Mutual Properties acquired Marriott and this resulted in the formation of SA Corporate Real Estate Fund where he was appointed Chairman. Old Mutual Properties also did a few joint ventures in Saudi Arabia where they developed 5 shopping centers as well as in India where they managed retail properties as well as developed a few shopping centres. At Old Mutual he ended his career as head of Distribution, Marketing and Strategy.

One of Ben’s highlights in his career was in 2008 when he was appointed as President of the South African Property Owners Association (SAPOA) where he served as President until his term ended in 2009. Ben served the association as Director for a total of 6 years.

He served as Chairman of SA Corporate Real Estate Fund Managers Limited until 2011. SA Corporate Real Estate Limited is a Corporate REIT (Real Estate Investment Trust) listed under the Real Estate, Diversified REITs sector of the South African Stock Exchange, the JSE Limited (JSE). SA Corporate is one of the oldest and most established property companies in the South African market. The Company features an attractive portfolio diversified across 178 properties, which covers 1,39 million square metres of lettable space.

In August 2012 he was appointed Managing Director of STANLIB Asset Management and later STANLIB Africa where he served until December 2015. STANLIB manages and administers over R584 billion (assets for over 500 000 retail and institutional clients and has a presence in ten African countries. In terms of property they invest in South African, African, Emerging Markets and Global listed and also do direct property investments.

Bens’ Property Investment Philosophy

  1. Always do your homework before investing. Whether you are acquiring a business, a property, doing a development, read as much as you can about the opportunity and understand the environment surrounding the opportunity.
  2. Understand the numbers and make sure the investment case makes sense and you understand the sensitivities behind the assumptions you have made.
  3. Buy or partner with people who have skin in the game and a vested interest in the success of the venture and people that you can trust and have a demonstrable track record.
  4. Invest in what you know.
  5. Diversification, diversification, diversification

On 1 June 2016 Ben was appointed as CEO of Sanlam Alternatives, which includes single manager hedge funds, Africa investments, private equity and direct property investments. On listed property they focus on developed markets and emerging markets including Property Exchange Traded Funds (ETF’s).

Q & A

  1. How did you first become involved in the property industry? 

I first became involved in the property industry when I got appointed to lead Old Mutual Properties as Managing Director. My appointment was firstly to provide succession to Ian Watt who had successfully lead the diversification of the property portfolio into the retail sector and established some of the first Super Regional Shopping Centres in South Africa. Secondly, I was tasked with growing Old Mutual’s property portfolio. The journey saw us significantly growing the property portfolio from around R4bn of assets to circa R32bn of assets at the peak. We acquired properties, bought property companies such as Marriott and developed a lot of our properties to make them relevant and attractive to tenants. We also diversified our property portfolio to other geographies such as Namibia, Saudi Arabia and India.

  1. Share any highlights and insights gained during your career journey.

From an industry perspective, property requires a partnership between industry and government (national, provincial and local) given the size of the industry and its impact on the economy. The advocacy that SAPOA and the industry does to align objectives, remove roadblocks and establish relationships with the public sector is important and vital for the success of the industry.

The property industry is about relationships with all those involved in it. It is largely a transactional environment in most aspects of it. Time spent establishing and maintaining relationships with the key players is vital for success.

Transformation has been a key priority for many years with mixed achievements of what is needed. Progress has been made in other areas but ownership of the sector by black people and women as well as leadership of property companies still has a long way to go.

Property is about detail. The more we educate ourselves on the different aspects of the property value chain, the more we can better design, develop and manage our built environment. The various performance benchmarks by the likes of MSCI (IPD) have gone a long way to enable efficient management of our property portfolios to enhance yield and return for investors as well as better transaction values of properties through better information that is now accessible.

Property is about a conscious evolution. The establishment of the Green Building Council and the work that has gone into educating and establishing standards for our built environment will do lots for the industry and society in terms of efficient

  1.  Please describe your first property investment and the most important lessons you learnt from the experience.

My first property transaction was way back in the early 90’s. My brother and I saw a huge residential opportunity in Berea where prices were depressed due to the transition that Berea node was going through at the time. We both saw good demand from tenants as there was an influx of people into the area and saw huge exit price potential when developers started investing in the node to restore its former glory. We were partially right on our investment thesis, tenancy was good and our tenants paid on time. What we did not bargain for was our tenancy being sub-let to other families without our approval. Our flat was being occupied by 3 families as opposed to one which resulted in accelerated wear and tear and increased maintenance costs. The property developers also never arrived.

Key lesson here is to always do your homework with property investments, check on your property on a regular basis even if your have outsourced the management of the building and stay tuned and close to what is happening in the node. We did not make the killing we anticipated but we did manage to read the environment and exited with a good return on our investment.

  1. What do you consider to be your most significant property deal or professional achievement and what insights can you share from the experience?

We did many property transactions during my time at Old Mutual Properties. The one significant one that stands out for me is the redevelopment of the Rosebank node, the Zone redevelopment. Rosebank at the time was lagging the developments that we had seen in Sandton to date and the developments that we taking place in Melrose. Given the diverse ownership of the node, we managed to get all the significant owners of the node together and started crafting a vision and plan to create a value proposition that will be differentiated and compete with the Sandton node. The result was significant investment that went into the node and a coordinated master plan that offers consumers a vibey place where they can shop, work, and play. The Gautrain station was just the cherry on top. Other development partnerships that stand out was with FirstRand on the development of Portside, creating the tallest building in Cape Town. Besides working with great professionals on that project, the assistance from the city of Cape Town and Province to make the reality come through still remains one of my best examples of what a partnership with the public sector can do for the built environment.

  1. What opportunities do you foresee in your sector/industry in South Africa, as well as in Africa. What is your vision for the company into the future? Any exciting new projects on the cards?

Although we are experiencing headwinds in terms of slowing growth, volatile currencies and low interest rates, we continue to see real demand for real assets. The need for infrastructure continues in SA as well as the rest of the continent, residential property offers a unique opportunity in SA and opportunities to fund and invest in small and medium enterprises continue. These opportunities are off the back of increasing urbanization and improving demographics. Sanlam Alternative Investments will continue to seek out opportunities to bring access for Real Assets to individuals and funds that are seeking real returns and looking to diversify their exposure to traditional assets. We will continue with our expansion activities in the continent.

Leave a Reply