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Why Malema should educate people on property misconceptions

Jun 21 2017 17:11
Carin Smith

Cape Town - Julius Malema should educate people on economic fundamentals and misconceptions about commercial property ownership in South Africa.

Estienne de Klerk, managing director of JSE listed Growthpoint Properties, made the plea at the annual convention and expo of the SA Property Owners Association (SAPOA) in Cape Town on Wednesday.

In his keynote address to more than 1 000 delegates, Malema emphasised repeatedly that, in his view, the property owners at the SAPOA convention were beneficiaries of past policies and are still benefiting from it and getting rich. SAPOA members, for instance, control about 90% of commercial property in SA and according to Malema black direct ownership in SA is less than 1%.

During question time De Klerk asked Malema what he will do to educate people around economic fundamentals.

READ: Public sector can do more to transform property sector - report

"There are certain realities in driving an economy and financing certain developments and ensuring success. Some of the policies you are proposing will not lead to success in SA and you can see that in what has happened in some social states that have collapsed," said De Klerk.

To this Malema replied that he does not agree that by saying the EFF holds a leftist perspective they need to educate themselves.

"You can point me to Zimbabwe and Venezuela, but I wish you to point to me the countries in Africa where capitalism has succeeded. They take profit even if it is at the expense of poor people," said Malema.

Misconceptions

De Klerk told Fin24 that there are many misconceptions regarding property ownership structures in South Africa, especially regarding large listed property companies. The biggest investors in terms of these companies are pension funds and large institutional investors (asset managers).
He said these are "colourless". The Government Employees Pension Fund is, for instance, one of the largest investors.

"If you analyse the shareholding of Growthpoint, for instance, you will see 85% are international and local institutions and the remaining is at least 50% black. The reality is that we in the property industry have achieved as a sector because it is so capital intensive. We will need significant capital investment from local and especially international sources to fund growth of the SA economy," said De Klerk.

"There have been efforts in the property sector and the Property Sector Charter is one example. We are actively involved in the process and it is frustrating that efforts made are often dismissed, while there have been meaningful actions."

De Klerk said the reality, therefore, is that a lot is being done, also for entrepreneurship programmes in the industry in order to create sustainable businesses.

"We believe there is a deep necessity to have discussions at national level on how the economy is supposed to function as there are very divergent views of getting to the end goal. Personally I feel there is too much focus on race and not on SA and South Africans working together. Even when there are successful initiatives to promote SA abroad, it is undone by certain rhetoric," he said.

"Business is the only place to create sustainable jobs and a sustainable tax base. Emigration of skills should be a massive concern as it also erodes the tax base. We have seen globally and locally that governments cannot run businesses."

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