Building on several hints thrown out in a series of recent press interviews, Stuart Chait, Chief Executive of Property Partners, the private equity and mezzanine property finance company, said that it is now quite clear that Property Partners' future lies in the partnering, assisting and financing of black empowerment companies looking to become involved in property development and/or investment.

"The numbers of such participants in property," said Chait, "are set to increase exponentially because the Property Charter will release R200 - R300 billion worth of state land and will compel corporate South Africa to cede some 25% of its property holdings to BEE groupings. In addition, major BEE groups in other fields are already looking to diversify into property."

Chait said that his team’s experience in dealing with BEE groups entering the property market, gained over a period of more than five years, is that they tend to be either over-wary or over-optimistic about the opportunities and dividends offered. They often, he said, lack the experience to value property accurately and the knowledge of how to unlock a property's inherent values. (Chait was a founding partner with Tokyo Sexwale in Mvelaprop, the first major BEE property development company in SA in 2001. Mvelaprop is based predominately in the Western Cape).

"Many of our BEE partners," said Chait, "have been brilliantly innovative and ingenious – but, having not been before in property, they often do not see the alternative possibilities, the many different end products available. There is sometimes a heavy emphasis on, say, the provision of commercial and industrial space without an understanding of how this could be made more viable and attractive with new urban layouts, better marketing and the addition of retail and/or residential components. Often, too, they do not have the contacts to get the most competitive funding for their projects."

Chait said that BEE partnering is likely to become so big a part of Property Partners' function (the company currently turns over R 2,6 billion per annum) that it will almost certainly result in their selling off their own property investments as these would prove a time-consuming distraction.

"The size of the property market will grow by a factor of five to ten within the next decade," said Chait. "It will, I believe, pay any BEE group to capitalise on this huge growth and to use the experience of those of who have already been in the field for several years. We will also advise and structure BEE transactions for developers and private and public investment companies, and are we well positioned to finance these transactions.”