New-look Liberty Properties lays foundation for Africa-wide growth

A major act of corporate reinvention at Liberty Properties is soon to become the catalyst for strategic domestic growth and expansion into markets across Africa.

The growth announcement by the Liberty Group’s reinvigorated property arm was timed for maximum effect, coming as high interest rates constrain consumer spending while power outages dampen the national mood.

Samuel Ogbu (pictured right), newly appointed CEO of Liberty Properties, notes: “Our growth plans are an expression of confidence in the South African economy, the retail sector and property industries, the future of specific communities like Mitchells Plain and the potential of numerous jurisdictions across the SADC region.

“Liberty Properties is on a growth trajectory. Our expanded structure will enable us to move from our recent positioning as net sellers to significant buyers of property. We now have a platform from which to reclaim our place as industry leaders.”

This year the company plans to spend R3.5 billion on upgrades, acquisitions and new developments. A wider vision is taking Liberty Properties to new geographies and broader areas of competence.

Its R18 billion portfolio already contains icons of the South African cityscape, including Sandton City and Eastgate shopping centres, Sandton’s Nelson Mandela Square and Greenacres in Port Elizabeth.

Though quality is as pronounced as ever, the number of properties in the portfolio has been reduced in recent years from 128 to 32. That’s going to change. Imminent expansion and upgrades include:

• Eastgate, where a 12 000m² expansion will bring gross rentable area to 126 017m² at an investmentcost of R350 million
• Liberty Promenade, Mitchells Plain, a 30 000m² office and retail expansion, taking gross rentable area to over 83 000m² at an investmentcost of R329 million
• a newregional Liberty Properties’ head office and hotel development in Umhlanga (an 11 000m² build at an investment cost of R260 million)
• Liberty Midlands Mall, Pietermaritzburg, where a 30 000m² hotel and retail expansion will bring gross rentable area to over 80 000m²

The company owns 11 hotels, some in partnership with Southern Sun. Properties include the Cullinan in Cape Town, the Sandton Sun and Sandton Intercontinental and a stake in Sandton Convention Centre.

New mixed-use and further hotel developments are key elements in the growth strategy, says Ogbu.

Though confidence in the future underpins expansion, unlocking policyholder value drives the decision-making.

“We’re custodians of policyholder wealth,” says Ogbu. “We have a broader vision, but retain single-minded focus on the best interests of the people who entrust us with their money.

“For example, we are committed to Liberty Promenade in Mitchells Plain, the largest retail investment yet in a previously disadvantaged community and are stepping up our investment at a time of consumer pressure. But this is not simply an act of faith. We also know there is a strong cash element within the local community, cushioning some interest rate effects.

“We’re judicious as well as ambitious.”

Cross-border activities into SADC countries receive increasing attention.

Ogbu explains: “Africa-wide synergies with our Standard Bank partners are being explored. Standard Bank has a substantial African footprint and this relationship can be leveraged to exploit significant opportunities.

“Discussions on certain projects have reached an advanced stage. We plan to make a more detailed announcement before year-end.(?)”

Until Liberty Properties’ reinvention, any geographic expansion would have been limited to property management. Today’s mission is much wider. The expanded structure covers:

• Property management, the original core business led by managing director Roger Corlett
• Property development, headed by managing director Caswell Rampheri
• Asset management, tasked with the job of maximising the portfolio’s policyholder value (MD Kgaogelo Mamabolo)

Previously, the company focused exclusively on its own portfolio. In future, new income streams will be created by providing services to third parties on an asset management model.

A controlling interest has been acquired in Fountainhead Property Trust Management, a Johannesburg-based property management company with a solid book of third-party business. Synergies with Liberty’s property management unit will be developed, though the distinct Fountainhead brand will be retained.

“We are committed to growing our asset base,” adds Ogbu. “New acquisitions are planned, either outright or in partnership with others. We are moving with purpose and intent into a new future.

”We’ve laid the foundation for growth, but we’ve not put a ceiling on it.”