The Eastern Cape’s two largest shopping malls, Baywest in Gqeberha and Hemingways in East London, are up for sale as Rebosis Property Fund, founded by property mogul Sisa Ngebulana, struggles with a massive R10 billion debt. These iconic malls in Nelson Mandela Bay and Buffalo City are part of a portfolio of five shopping malls across the country that Rebosis is selling after going into business rescue in August. According to the business rescue documentation, the combined value of Baywest and Hemingways is estimated to be around R3.3 billion.
Baywest, which opened in May 2015, and Hemingways, which opened in 2009, have established themselves as prominent fixtures in the Eastern Cape’s retail landscape. Rebosis, on the other hand, has been forced to sell these properties in order to address its financial problems. Rebosis is also selling Forest Hill (R860 million), Sunnypark (R652 million), and Bloed Street (R436 million) in addition to these malls.
Phahlani Mkhombo and Jacques du Toit, the business rescue practitioners, have set a July 20 deadline for final offers from potential buyers. Rebosis, a real estate investment trust, previously owned six malls before selling the Mthatha-based B.T. Ngebs Mall. Ngebs Mall, which was named after Sisa Ngebulana’s grandfather, Buchanan Tandi, was sold as part of the company’s efforts to address its financial problems.
Rebosis, which Ngebulana founded in 2010, primarily owns large single-tenanted commercial offices in areas of South African government interest. Prior to entering the business rescue, these office properties accounted for more than half of the company’s R13 billion in property assets as of its last reported results in February 2022. Rebosis had a negative cash balance and a net debt of R9.7 billion at the time.
In response to questions, Ngebulana stated that he is a minority shareholder and that he retired from the Rebosis board of directors in 2017. Further questions were referred to the company for comment. Ngebulana, on the other hand, confirmed that he founded the company and initially listed it in 2010 with his own assets worth R3.6 billion. He claimed that by the time he retired, the company’s assets had grown to R22 billion. He currently holds a 16% ownership stake in Rebosis.
Concerning the malls’ condition, it has been reported that certain properties in the Rebosis portfolio have been neglected due to a lack of funds for maintenance and refurbishment, resulting in high vacancies in some cases. On environmental grounds, the provincial government prohibited Baywest from building housing projects adjacent to the mall. Furthermore, the closure of the province’s only ice rink at Baywest in 2022 disappointed visitors and raised concerns about the mall’s ability to meet expectations.
Rebosis intends to reduce its financial burden and restructure its operations by selling Baywest and Hemingways. As prospective buyers submit their bids by the deadline, the fate of these prominent Eastern Cape malls hangs in the balance, awaiting new ownership and potential revitalization to ensure their future success.