Black practitioners' body warns of lost opportunities as industry sees no need to duplicate financial sector's charter

KwaZulu-Natal Correspondent

PROPERTY companies risk losing significant opportunities as they drag their feet over black economic empowerment and implement ation of an industry charter.

The warning comes from South African Institute of Black Property Practitioners, with spokesman Andy Tondi saying other industries have underpinned transformation with a real commitment .

Tondi questions this commitment within the property sector, saying the charter process is "potentially threatened by insufficient support and commitment" from established business.

Earlier this year the institute called for government involvement in forging an industry charter, on the grounds that the issue cut to the "core of our liberation struggle". If it was not addressed properly, it would "come back on us in the future", it said.

"The delay and apparent lack of energy towards this drive could result in significant lost opportunities for both established business and empowerment entities, as government insists on transformation as the absolute imperative for availing business opportunities to the private sector," Tondi says.

The institute urges co-operation between industry players in creating "a workable, realistic and inclusive" mandate.

However, there are already rumblings in the industry that a property charter could duplicate what already exists for financial services. As banks own listed and unlisted property and have to adhere to the financial services charter, a property charter may mean duplication.

The institute countered that property was "the biggest business" in the world and it therefore would not allow property to become "subservient to a financial services charter".

Broll Property Group CEO Arnold Meyer says the charter could trigger a long-term consolidation of the commercial property sector, given that there are many smaller property managers that cannot conduct significant empowerment transactions.

This will prompt managers to take over smaller businesses or for small businesses to merge into medium-scale ones, he says.

"In drafting the charter, we are mindful that transformation is not just about empowered shareholding, but about addressing education and empowering individuals in equal measure."

Meyer says that in forging a charter, the industry showed its commitment to transforming SA and more broadly, its commitment to the New Partnership for Africa's Development .

When she took office in May, commercial property association Sapoa's president, Lynette Finlay, made the charter her top priority. She expects the initiative to be in place by next year, but acknowledges it is going to be "a major task" as all the association's affiliates have to be included.

" We shall look at key risk factors likely to affect the industry and develop a framework to overcome these issues on a long-term sustainable basis," Finlay says.

Aug 11 2004 07:32:33:000AM Nicola Jenvey Business Day 1st Edition