Property Reporter

THE commercial property industry will have to be careful that it does not duplicate in the proposed property charter what already exists under the financial services charter, says Johannesburg-based property economist Francois Viruly.

Viruly was comment ing on a Business Day report which said that the historically white commercial property sector was next in line for a charter fast-tracking black economic empowerment.

The proposed property charter follows similar efforts in the mining and financial sectors, and is expected to be in place by early next year.

Viruly says that while charters are important, the banking sector is playing a critical role in the property sector in terms of financing for property projects.

"The issue arises whether one of the fundamental components of the property market, mainly financing of projects, is not already handled indirectly by the financial services charter," says Viruly.

He says that, under the terms of the financial services charter, banks would already have an influence over the property sector.

Angelique de Rauville, managing director of Provest, which is part of the Investec Property Group, says the listed property sector will welcome a property charter.

"Some of the listed property companies and funds already have a modus operandi in terms of addressing the implementation of these strategies.

"If the charter is implemented, it will result in the expedient implementation of these strategies."

De Rauville says that in terms of the existing property unit trusts and property loan stock companies, ApexHi already has a black economic empowerment associate in Mvelaphanda Holdings, which has a 25% stake in ApexHi's asset management company.

"I think many more asset management companies will start looking for suitable black economic empowerment companies to take equity stakes in the asset management companies of the various property unit trusts and property loan stocks," she says.

Brian Kirchmann, CEO of the South African Property Owners Association (Sapoa), says the Property Council of SA (Procsa), which has a membership of 10 property associations from the residential and commercial sectors, including Sapoa, has appointed a consultancy to drive the process.

"We as an industry are serious about transformation and meaningful black economic empowerment. It is no secret that the industry has been a little on the back foot due to previous government policies, which made it difficult for black people to own and develop commercial properties in many areas," says Kirchmann, who is also the manager of Procsa.

Kirchmann says the industry is aware that in order to redress the imbalance further over the long term, it needs to attract people of school-leaving age. It is hoped that the Sapoa learnership programme would do that.

The programme, part of a number of educational programmes aimed at training people in the property industry, offers a government-sponsored programme where learners are placed in a Sapoa member company for a year.

During the year, there are certain theory-based programmes taught and, at the end of the year, learners have a qualification and practical hands-on training.

After this there is no obligation on either the learner or the company to continue the association.

Kirchmann says these events will undoubtedly form part of the informal, if not the formal, discussions at the annual Sapoa convention, to be held at the Cape Town Convention Centre from May 12 to 14 this year.

Jan 28 2004 07:43:07:000AM Nick Wilson Business Day 1st Edition