ABSA Real Estate Management (Ream) will outsource its residential valuations department in a R375m black economic empowerment deal over five years.

The outsourcing involves the establishment and contracting of eight regionally based valuation companies.

The company said at a media conference yesterday that the move followed the implementation of Ream's state-of-the-art eBusiness initiatives aimed at improving turnaround times and productivity.

At the briefing, Absa group executive director Israel Skosana said that the bank's residential valuations department had operated with a staff of 340 in 41 valuation offices countrywide and processed about 340000 valuation activities a year. The department valued about R50bn worth of real estate last year.

Skosana said the 340 Absa staff members would be absorbed into the new companies and offered shareholding.

In the smaller areas including KwaZulu-Natal south, Polokwane, Mpumalanga and Bloemfontein the companies would be 100% staff owned.

In the four larger regions including the Cape, Durban, Johannesburg and Pretoria the companies would be taken up by consortiums consisting of 26% staff, 37% black economic empowerment ownership and 37% quantity surveying practices. The contracts for regional rights would be valid for five years.

The overall empowerment shareholding would stand at 40%.

"The sustainability of the new agencies is not compromised because the skills are there from Absa staff, as well as the quantity surveying companies," Skosana said.

He added that the eight companies had a contractual arrangement with Absa, but would also operate on the open market and contract with third parties.

The new companies had already secured a contract to conduct residential property valuations for SA Homeloans.

Skosana said this kind of arrangement created "new opportunities" for the companies.

He said the different empowerment companies involved in the agencies were spread countrywide. "It's not just one group that will be benefiting. It's very broad- based. There was a deliberate intention from our side to get people from previously disadvantaged communities playing a role in residential property valuation."

Saul Gumede, MD of Dijalo Property Services, one of the empowerment companies involved, said the empowerment companies aimed to increase valuation skills in the industry and to increase the entrance of blacks and women to the profession.

Skosana said Absa had appointed 15 in-house black graduates to be trained as commercial property valuers. Of the 1200 qualified valuers for the 9-million properties in SA, only 30 are black. The 15 in-house trainees would embark on a four-year programme, which combined technikon education with practical experience, and would cost Absa R3m a year.

Skosana said most of the valuation companies were small to medium-sized enterprises operating in a market where there was an oversupply of work and an undersupply of skills.

Absa also announced a new automated valuation process which uses a computerised statistical valuation model comprised of a valuer's hand-held device, and a cellphone-linked personal digital assistance device.

The new system will generate valuation requests electronically and send them, via a central system, to the valuer in the field.

Jun 26 2003 07:33:27:000AM Nick Wilson Business Day 1st Edition