Publications
Partners
Johannesburg – The property sector is critical for economic development, however the majority of the population is excluded from this sector, said Nkuli Bogopa, president of the South African Institute of Black Property Practitioners (SAIBPP)
Bogopa spoke to Fin24 in a telephonic interview on Tuesday. She explained that transformation in the South African property sector was lacking. The SAIBPP plans to host a convention in November to find a solution to achieve transformation goals in the sector.
“What we have done so far to enable transformation has not yielded results. It is time for action,” said Bogopa. Although Broad-Based Black Economic Empowerment (BB-BEE) is a good tool, alone it was not enough and has to be accompanied by new, different measures. “It must be paired with something else.”
According to statistics from the Royal Institute of Chartered Surveyors (RICS), about 70% of world wealth comes from real estate. In Africa and South Africa where economic development is a priority, the property sector can be a driver of the growth that is needed, explained Bogopa.
However the majority of the population, about 80%, is excluded from this sector. “This does not create an equitable economy,” she said. We need inclusion and transformation to create an equitable economic environment, she explained.
According to the State of Transformation Report for Property Sector report, published in June 2015 by the Property Sector Charter, South Africa only performed above its targets in enterprise development, by 115% and socio-economic development, also by 115%.
State of transformation in the property sector
Enterprise development and socio-economic development were the only areas which exceeded transformation targets, according to the State of Transformation Report for Property Sector report.
The improvement in enterprise development is a good sign, said Bogopa. It shows that small businesses are supported. However a lot of work still needs to be done, because this improvement is from a small base.
Other statistics show that black voting rights make up 25% of ownership and 10% of voting rights are attributed to black women. Ownership is below target but still yields good performance at 82%.
Areas that require focus include skills development, spend is at 3%. Spend on black learnerships is at 5%. Other areas of improvement include management control, employment equity and economic development.
Government is a key player in enabling change said Bogopa. “If government is going to keep making use of untransformed businesses in its procurement processes, then it is a problem, especially after 22 years of democracy.”
Although government has the policies in place to enable transformation, there has been limited implementation of these policies so far. “We need to get down to the business of doing things.”
Access to finance is the biggest problem to enabling transformation. This is followed by exposure for young people to the sector. “Young people are not exposed to the opportunities in the sector,” she said.
