MGM, a housing industry success

By Andreas Kathindi
November 2013
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The Mbutus’ success story is proof that patience and perseverance does pay off. The couple is a super-team of Nathan Pieter Mbutu and Madeleine Mbutu who run the Madeleine Groenewald Mbutu (MGM) Properties.

 

But things were not always as financially smooth when they started. Rewind to eight years back, the couple would struggle to pay their children’s school fees and other expenses. Worse, only Madeleine had a consistent income to sustain the whole family. Nathan could not get a decent job, hence he turned to odd jobs like tour guidance; showing tourists from as far as North Korea, around the country.

 

The idea of the business was first conceived by his wife, Madeleine, who is a teacher by profession. She sought to financially emancipate her family. She got a loan of N$11 000 from Michelle McLean Trust and with that, she renovated their house’s garage into a bachelor flat. They rented it out and that was the genesis of the property business.

 

“After making some money off that, we registered our company in 2005, took out a loan and bought another house, which we renovated and rented out,” says Nathan who describes himself as a born entrepreneur.

 

With what was supposed to be their first step on the ladder in growing their business, they soon hit their first snag. The house they had just bought was in estate following the previous owner’s sudden death and therefore, the deal had to be signed off by all the heirs. All of the Mbutus’ investments had been put in this one house and any loss would be detrimental to the new business.

 

“From that experience, we learnt the importance of doing proper research before making any investment. It took over a year to resolve it and get all the heirs to sign off the house,” recalls Madeleine.

 

With the issue behind them and with the money they had just made off that house, they paid off all their debts and acquired more land.

 

As the company grows, today, the Mbutus look back at their first hurdle in the property industry only as a mere amicable contest. One of their biggest challenges now is acquiring land.

 

“Acquiring funds to buy land is difficult. The process is strenuous, especially for previously-disadvantaged people. The bureaucracy for approval and red tape around land subdivision is also very frustrating,” laments Nathan.

 

The most common service they offer is sectional title development. This is the separate ownership of units within a complex or development. The biggest project they are currently working on now is the Faith City project in Rocky Crest, which Nathan insists is “one of the biggest projects currently being built in Windhoek.”

 

Nathan also states that word of mouth is MGMs strongest mode of advertising, which is primed on the business’ quality and excellence. That same work has seen them earn a second place as Bank Windhoek’s 2012/13 Developer of the Year for bringing the bank business worth N$40m.

 

“We were so proud to see a previously-disadvantaged black man walk to the podium to receive the award,” beams Nathan.

 

The company also has an arm focused on the construction of affordable housing to lower income groups called Eumbo Letu Building Enterprises cc. To date, it has constructed a number of houses worth between N$60 000 and N$350 000 for people living in informal settlement areas.

 

Eumbo Letu Building Enterprises has also donated houses to people in need. One such person is a mother of seven, Monica Kapetua, who lived in a shack in the Goreangab Dam area before MGM, in collaboration with Paul van Harte Investment and the City of Windhoek’s housing department came to her rescue.

 

”We would like to do more of such projects but without assistance from Government, it becomes very difficult,” says Nathan.

 

At the moment, MGM has 193 operations with a strong workforce of 105 skilled workers. Of that figure, 16 are female skilled bricklayers, 88 are unskilled while six are part of the administrative staff.

 

 

Nathan says MGM is passionate about empowering its workforce and thus provides scholarships to it to acquire more skills. The company also takes in interns from Windhoek Vocational Training Centre (VTC).

 

“Cement is the driving force in the housing industry. But as long as cement is expensive, houses will remain expensive,” Nathan says.

 

He further recommends that the local housing industry exploits the bilateral relation between Namibia and China. Other businesses import cement in bulk from China and sell them in Namibia at high prices when that could be avoided if wisdom was applied, he adds.

 

Although MGM only operates in Windhoek, for now, the couple plans to expand it, as far as the Western Cape in South Africa. The two have been approached by several local regions, seeking business but Nathan feels they are not done with Windhoek yet.

 

“We still need to have our foundation right. We believe in taking care of home needs first before venturing out and that is what we are currently doing,” he states, adding, the company is in the process of training its staff to lead the different branches of the business as it expands.  PF