Transformation lagging behind in residential
THE PROPERTY sector needed to pick up the pace of transformation, particularly the residential property sector, despite the sector making “reasonable efforts” towards transformation.
Portia Tau-Sekati, the chief executive of the Property Sector Charter Council, said the residential property sector was lagging behind, with only a very limited number of broad based black economic empowerment (BBBEE) certificates submitted.
Tau-Sekati also said at the release of the 2015-2016 State of Transformation Report for the Property Sector that the public sector was not taking the active lead expected of it to further the transformation agenda.
The release of the report coincided with the gazetting of the long-awaited amended property sector code on Friday.
Tau-Sekati said overall the property sector achieved an average BBBEE recognition of Level 4.
“This is reasonable based on the previous scorecard. However, the sector will have to work harder to retain Level 4 based on the new BBBEE recognition scores,” she said.
Tau-Sekati said the new research report sampled 72 companies to measure transformation in the industry, which may be small in number, but adequately reflected the industry outlook because it covered the large companies that dominated the sector.
She said the sector’s transformation under the previous code was measured on eight points, with excellent performance achieved against the targeted weighting for enterprise development and socio-economic development.
Tau-Sekati said reasonable but below target performance was achieved for ownership and preferential procurement.
However, she said more focus was required on skills development, management control, employment equity and economic development.
“Management control, employment equity and skills development are interrelated, so it is unsurprising that the under-performance of the three elements comes as a package.
“It is difficult to achieve one of these three key imperatives without another,” she said.
Tau-Sekati said these three low performing elements showed that there was an under-representation of black people and black women at all levels of management, including real board participation.
“You need to have black people and women in management and invest their talent to achieve skills development targets.
“By the same token, you need to invest in skills management to achieve your targets for talented black management in the future,” she said.
Tau-Sekati added that the lack of performance in skills development would perpetuate the present transformation scenario, adding it was critical that enterprises in the property sector adequately invested in skills development.
“The sector needs to promote skills development at a sectoral level rather than on a company level. This needs to be done in collaboration with academic institutions to build a curriculum that meets current and future needs,” she said.
Tau-Sekati said economic development was the lowest scoring element against its set targets, but there were “some bright lights” because of reasonable efforts undertaken by most of the sector’s larger companies.
Leading examples of this were the development of shopping centres in townships and some rural areas, she said.
“While it makes business sense that the property sector targets investment opportunities at areas with relatively high income, we hope the future direction will lead the sector to match this with a portion of investment into the poorest areas, those that are completely under-resourced, and where development is needed the most,” she said.
Tau-Sekati said the amended property sector code applied the lessons learnt on the sector’s transformation journey so far, including the findings of the latest research, while also addressing some of the previous gaps and aligning other legislation and policies to ensure that transformation in the property sector continued at the required pace.