Black youth key to TRANS­FORM property in­dus­try

The sec­tor is dom­i­nated by big players who are not ad­e­quately in­cen­tivised to open the space, writes Jack­line Okeyo

CityPress - - Business -

It is time for South Africans to re­think property ed­u­ca­tion and train­ing if we want to get more young black peo­ple into the sec­tor. An in­creas­ing num­ber of black-owned com­pa­nies have set up shop in the property sec­tor, par­tic­u­larly in the pro­vi­sion of property ser­vices. How­ever, property own­er­ship re­mains un­der­rep­re­sented when it comes to trans­for­ma­tion be­cause of the cap­i­tal-in­ten­sive na­ture of the as­set class.

Usu­ally, mainly large com­mer­cial property com­pa­nies have the re­sources to take ad­van­tage of most op­por­tu­ni­ties in this market.

The real­ity is that the com­mer­cial property sec­tor re­mains rel­a­tively un­trans­formed; pref­er­en­tial pro­cure­ment points and en­ter­prise de­vel­op­ment in­cen­tives set by sec­tor codes are not enough to break down bar­ri­ers to en­try.

Lack of track record is of­ten used as the pre­text for not grant­ing new black busi­nesses an op­por­tu­nity to par­tic­i­pate.

Although the pub­lic sec­tor has cre­ated op­por­tu­ni­ties for new players, pay­ments are rou­tinely de­layed, re­sult­ing in pre­car­i­ous cash flow for smaller and pri­vately-owned busi­nesses which sim­ply can­not af­ford the risk.

THE COM­MER­CIAL PROPERTY PIC­TURE

A 2016 study com­piled for the Property Sec­tor Char­ter Coun­cil re­vealed that the South African property sec­tor is worth an as­ton­ish­ing R5.8 trillion, with com­mer­cial property mak­ing up about R1.3 trillion of the to­tal.

The bulk of this, al­most R790 bil­lion, is held by corporates, fol­lowed by real es­tate in­vest­ment trusts with R300 bil­lion, un­listed funds at R130 bil­lion, and life and pen­sion funds at R50 bil­lion.

As an as­set class, property is long term and has the abil­ity to pro­vide both an­nu­ity in­come and growth in cap­i­tal value for the in­vestor.

When you con­sider the bricks and mor­tar as­pect of property, there is a long value chain – from project con­cep­tu­al­i­sa­tion, pro­cure­ment of ma­te­ri­als and con­struc­tion, to property and fa­cil­i­ties main­te­nance.

The po­ten­tial for job cre­ation and en­ter­prise de­vel­op­ment is sig­nif­i­cant. To grow black en­trepreneur­ship, funding has to be made ac­ces­si­ble. At present, it is ex­tremely dif­fi­cult to raise cap­i­tal. But that is not the only chal­lenge. The sec­tor is dom­i­nated by a hand­ful of big players who are not ad­e­quately in­cen­tivised, or re­quired, to open the space to emerg­ing com­pa­nies.

What is more, the sec­tor is con­ser­va­tive and risk-averse, with much em­pha­sis placed on ex­pe­ri­ence.

This tends to pe­nalise younger players try­ing to make in­roads, whether in the en­tre­pre­neur­ial space or on the cor­po­rate ladder.

Com­bined with this set of cir­cum­stances is the real­ity that most young black peo­ple have lim­ited gen­er­a­tional wealth and net­works in property.

These take decades to build.

EN­VI­SION­ING A CA­REER IN PROPERTY

Young peo­ple in gen­eral don’t al­ways un­der­stand the depth of the sec­tor and ca­reer op­por­tu­ni­ties that ex­ist, par­tic­u­larly when one con­sid­ers listed and un­listed com­mer­cial property.

There are many facets to property, beyond es­tate agency and property val­u­a­tions.

Black youth, par­tic­u­larly in un­der­re­sourced communities, need im­proved ac­cess to in­for­ma­tion, via the in­ter­net or ca­reer days at schools for ex­am­ple, with the par­tic­i­pa­tion of com­pa­nies and ter­tiary in­sti­tu­tions.

South Africa needs a plat­form to cre­ate a greater sense of aware­ness and ex­po­sure to the prom­ise of property as a sec­tor.

In­dus­try bod­ies such as the Property Sec­tor Char­ter Coun­cil, the Women’s Property Network and the South African In­sti­tute of Black Property Pro­fes­sion­als have al­ready started with school ini­tia­tives to im­prove ac­cess to in­for­ma­tion. More needs to be done along these lines. The cur­rent ed­u­ca­tion sys­tem has fo­cused more on the­ory, and less on the prac­ti­cal skills re­quired on the job.

Ter­tiary in­sti­tu­tions need to make pro­vi­sion for stu­dents to ob­tain solid work ex­pe­ri­ence as a pre­req­ui­site for their qual­i­fi­ca­tion.

Real-world case stud­ies should also be part of the cur­ricu­lum, to make stu­dents aware of the chal­lenges faced by the sec­tor, par­tic­u­larly at an un­der­grad­u­ate level.

Stu­dents leav­ing ter­tiary in­sti­tu­tions should be equipped to step into the sec­tor with an in­no­va­tive at­ti­tude that can shake up the in­dus­try and drive greater en­trepreneur­ship.

The market has placed more em­pha­sis on ex­pe­ri­ence and age over solid qual­i­fi­ca­tions, which has done lit­tle to in­cen­tivise in­sti­tu­tions to for­malise their ed­u­ca­tional of­fer­ings, or to think out of the box to im­prove and change the sta­tus quo of the in­dus­try.

Post­grad­u­ate qual­i­fi­ca­tions in the built en­vi­ron­ment are aimed mainly at new en­trants and don’t take into ac­count the needs of young peo­ple al­ready in the sec­tor who have a bur­geon­ing ca­reer in property and want to fur­ther their ed­u­ca­tion.

As a re­sult, in­dus­try as­so­ci­a­tions have had to fill some of the gaps with short cour­ses.

A WORLD OF OP­POR­TU­NITY

The good news is that there are big op­por­tu­ni­ties out there. There has been lit­tle innovation from an IT per­spec­tive, other than apps con­nect­ing property buy­ers and sell­ers.

We need tech­no­log­i­cal im­prove­ments that can help land­lords better man­age their property port­fo­lios by driv­ing ef­fi­cien­cies; we need IT so­lu­tions that can have a sig­nif­i­cant im­pact on the bot­tom line.

This could be a good en­try point for black youth in­ter­ested in the in­dus­try.

Young peo­ple want­ing to get into the sec­tor need to iden­tify com­pa­nies where they can be in­terns or vol­un­teer to gain ex­po­sure. Okeyo is head of busi­ness de­vel­op­ment and

op­er­a­tions at Nth­wese De­vel­op­ments

PHOTO: AP

MAY THE FORCE BE WITH YOU Fig­ures of Yoda from Star Wars that have been cre­ated with a 3-D printer are dis­played at the Rapid.Tech and FabCon 3.D trade fair in Er­furt, Germany, on Tues­day. More than 200 ex­hibitors from across the globe present the lat­est prod­ucts and ap­pli­ca­tions in the fields of ad­di­tive man­u­fac­tur­ing and 3-D print­ing at the con­ven­tion

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.