27% BEE target for property sector comes into effect

Cape Town – The amended Property Sector Code setting a black ownership target of 27% for property owning companies came into effect on June 28 2017.

“This is higher than the 25% black ownership target of the Generic Codes,” said Trade and Industry Minister Rob Davies.

“In addition, the new sector code has set a target for established companies to financially support those that are at least 51% black-owned."

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The value of the finance to be made available is up to 2% of total development or redevelopment expenditure.

This measure has been introduced to make capital available in the sector to enable black-owned companies to develop and acquire properties.

According to Davies, only 13% out of 38 000 estate agents in South Africa are black.  

“These are some of the challenges that the Amended Property Sector Code seeks to address.”

The new code is legally binding for all entities and organisations operating in the property sector, and is applicable to commercial activities in the residential and commercial industries of the property sector.

It also applies to companies operating in the areas of property development, property services, property and facility management, broking, valuation, estate agents and other professional services.

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Even though the main focus of the amended Property Sector Code is not on land reformation in South Africa, Davies said it should contribute towards reversing the legacy of the Native Land Act 27 of 1913, and subsequent discriminatory policy and legislation which denied black people access to productive land and property.

“Furthermore, it should contribute towards development and investment in the marginalised areas of our country.”

To achieve this, the code has introduced a measurement indicator called Economic Development which aims to stimulate property development in under-resourced and marginalised areas.

The set target is 10% of all annual investment for development or redevelopment, Davies said.