New property baron Tito Mboweni: Intends turning Fourways into Manhattan of Africa, surpassing Sandton City

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Former SA Reserve Bank Governor Tito Mboweni has taken well to business. This morning he ushered in the JSE’s newest listing, Accelerate Property Fund, whose R6bn portfolio is dominated by the Fourways Mall, an enormous development north of Sandton. In this engaging and wide ranging interview, Accelerate chairman Mboweni moves from Nelson Mandela’s turnaround from Nationalisation – he served in Madiba’s Cabinet as Labour Minister – through to how he was drawn into Accelerate, the core of which was the Georgiou family’s property empire. Mboweni says the company aims to make the Fourways precinct better than Sandton City – and let slip that the company is working on acquiring a major development in Bloemfontein. – AH     

To watch this CNBC Power Lunch video click hereTito Mboweni - Accelerate Property Fund

ALEC HOGG:   Accelerate Property Fund listed today on the main board of the JSE in the Real Estate Holdings Development and sector.  Joining us to explain more about the listing is its Non-Executive Chairman Tito Mboweni.  Well, we know that you’re very used to being on television, Tito.  I was saying to Gugu when we came on air, going back to 1992…how things have changed.  The two of us were playing around in Davos in the snow.

TITO MBOWENI:  It’s quite a while ago, isn’t it?  It just shows how old we are.  I think those were very interesting days for South Africa.  We were beginning to put South Africa back onto the global map, remember that South Africa had been in isolation for many years.  Those days were beginning to plant the seeds of South Africa’s return to the global economy – a lot of hard work, those days – and that, I am happy to say, has paid off quite well.

GUGULETHU MFUPHI: You say you planted the seeds there – do you think we’ve done a good job so far, looking back?

TITO MBOWENI:   I think we’ve done very well, indeed.  Remember, we were a bunch of ex freedom fighters…some of us fresh from the bush etcetera.  We had never run a country.  We had never run a company, actually.  We knew how to explode bombs and how to shoot.  In those days, remember when President Mandela came out of prison he said that nationalisation was the policy of the ANC, and a change in this regard was not possible.  Those conversations at Davos and in other places, also played a role in influencing his own thinking.  I recall him meeting the Prime Minister of Vietnam – and the conversation was all about nationalisation etcetera.  The Prime Minister of Vietnam said ‘look here, Mr President.  The ANC and ourselves are very close and we’ve been close for many years.  We are a communist party government.  You are a national liberation movement.  We are talking privatisation and you are talking nationalisation.  It doesn’t make sense’.  The world has changed.  To his credit, Madiba changed with the times and we began to plant these seeds, which today have I think, germinated.  We have stabilised the macro economy.  We have brought inflation down.  We have brought under control the budget deficit before borrowing.  We have reduced the debt levels.  Remember, the service charges on the debt used to be the first item on the budget.  Now it’s no longer the case.

ALEC HOGG:   We have to talk about your business, Tito……

TITO MBOWENI:  Let’s talk a little bit about this because I think business thrives within the context of a well-managed macro economy.  I think we have done well over the years.  There are some bumps here and there.  I say to people in the ANC ‘I will talk about the economy.  You talk about these other difficult things, which I don’t talk about’ but they must talk about it.

GUGULETHU MFUPHI:  You don’t complain about potholes.

ALEC HOGG:   It’s a lovely story and I’m so glad you repeated it here about Madiba being influenced by Vietnam because the thought is the people from the West changed his mind.  Let’s talk about Accelerate.

TITO MBOWENI:  Of course, we’ve come to talk about that.  I must remember which hat I’m wearing.

ALEC HOGG:   It’s good to see you in the business community, and particularly with a very interesting company – with Sacoil, which I’m sure we’ll have another chance to talk about that.  Of course, Anglogold Ashanti we all know about, but today’s new listing – Accelerate…  How did they bring you into this property business?

TITO MBOWENI:  Purely by accident…  There was this crazy Greek man who owned a large portfolio of buildings and shopping centres all over the place.  He came to me and said ‘look, I’m old.  I’m used to having a book in front of me, and a telephone.  I scratch around…who has paid the rent and who hasn’t’ and he said his portfolio has grown so much that he can’t manage it anymore.  ‘I need younger people who understand something about business to come and run this thing.  Can you help me establish a corporate, an identity, and a board of directors with all the things that go with corporate governance and a board charter etcetera’?  ‘Appoint an Executive Manager that must run the company and prepare it for listing.’  We began talking about that and we came to the conclusion that the listed company would be named Accelerate Property Fund.  He had far too many properties and so we could not bring all those properties into the Accelerate Property Fund, but we chose the good ones: the Fourways Mall Precinct, which is wonderful, some properties in Cape Town and in Durban.  However, we are eyeing one for the future, which will be the largest shopping and entertainment area in the middle of South Africa – Bloemfontein.  That will be an additional cherry on top.

ALEC HOGG:   Is it built already, this one in Bloemfontein?

TITO MBOWENI:  I can’t talk more about it, but that’s what we are aiming to bring into our portfolio.

GUGULETHU MFUPHI: Why there in particular?  Usually, people move to the Western Cape, KZN or even Gauteng…why Bloemfontein?

TITO MBOWENI:  Well, Bloemfontein is in the centre of South Africa and the people there need services, too.  We are also keen to demonstrate that development doesn’t just take place in Johannesburg and Cape Town, and that even in Bloemfontein things can happen.  We therefore brought these properties together.  I brought a very good team together that does the operational management.  We’ve had to do all kinds of things: sort out bankers and have lawyers.

ALEC HOGG:   Raise R2bn.

TITO MBOWENI:  Raise R2bn.  In fact, there’s one fund, which invested about R750m, which is a sign of confidence.  I told old man Georgiou ‘you have been running this thing as a family business.  Now you are asking me to be the Chairman of the Board.  Do you know what you’re getting yourself into?’  It took about eight months of conversation for him to understand that he had actually ceded control of the company to me.  I’m very pleased about it, but it took a lot of conversation and he now fully understands.  We have a broad base of investors and the Board of Directors is responsible for the governance, strategy, and the supervision of the Executive Management.  They are also there to make sure that we continue to create very good shareholder value.


ALEC HOGG:   You’re – kind of – the landlord of Fourways, aren’t you?  Fourways Mall, Fourways Game…I see a many properties with the name of Fourways in your portfolio.

TITO MBOWENI:  You see, you have the Fourways Mall and then you have something called the Fourways Precinct, but it’s in that whole area there.  We think that we are going to develop something better than Sandton City there: large shopping complex and offices.  We’ll combine that with Cedar Square – where the BMW centre is – and create a large property there.  We are hoping to create what I call ‘the mini-Manhattan of Johannesburg’.


ALEC HOGG:   I have to ask you, just as a final question…talking about Manhattan.  I don’t know if you followed the AECI story with the Chinese investors who were talking about creating a Manhattan in Modderfontein.  You’re now a property man.

TITO MBOWENI:  Well, the more Manhattans we have, the better.  I think this is a wonderful development.  I know many people have criticised the decision to sell the property to the Chinese.  However, if you say you want foreign direct investment, can you choose it?  Are we only going to prefer American investment as opposed to Chinese investment?  No, you want foreign direct investment…you must accept that from wherever it comes.  I think the fact that South Africa is part of the Brics Community of Nations, makes sense.  South African companies are going to invest in China.  They’re going to invest in Brazil, and so Brazilian companies will invest in South Africa etcetera.  We therefore have to be serious about that Community of Nations.  It must become an economic community as well, so I’m pleased.  I have no problems


ALEC HOGG:   Let’s hope the money comes in.  I think that’s where the criticism is.

TITO MBOWENI:  Lots of money will come in.

ALEC HOGG:   Let’s hope so.

TITO MBOWENI:  Look beyond the squatter camp.

ALEC HOGG:   Indeed.

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