While the property charter is scheduled for official promulgation before year-end, there remains, nevertheless, a number of key issues that have yet to be tackled.

Speaking at the property management summit hosted by the Department of Public Works, Property Sector Transformation Charter chairperson Lehlohonolo Tondi pointed out that, despite the number of challenges being faced, government, the largest shareholder in the property market, had enough stock to make empowerment a reality.

He said that while there was not enough stock in the public sector domain, if government released some of its stock for empowerment purposes, then BEE, which was not an end in itself, but a means to an end, would level the playing fields much sooner.

Tondi pointed out that the Public Preferential Procurement Facilitation Act (PPPFA), was proving to be a great obstacle to the black economic-empowerment (BEE) process, especially as the act gave a low rating of 10% and 20% to BEE involvement in the tendering process.

“The PPPFA is a great problem. The codes of good practice can’t co-exist with this act,” he said, adding that he was personally concerned about the PPPFA impact on the industry.

He added that despite there being much uncertainty surrounding PPPFA, government was the entity that could effectively kick-start the empowerment process.

According to Tondi, there were numerous deal flow problems, including minority stake, vendor-financed deals with strings attached, majority stake (he who owns controls procurement), government leases, which were unable to enter into long-term lease agreements of ten years and more, fronting deals, ownership without control, ownership for immediate onward selling and ownership without economic interest.

Skills and expertise shortage also formed a key challenge.

Tondi pointed out that there was definitely a severe skills shortage in the property industry and that not many institutions offered industry-related courses.

A property academy to specifically address the skills crisis was being formed.

“The property academy will identify industry needs and determine the relevant courses for the property industry,” he said, adding that the academy, which would soon go public, would be involved in skills analysis.

He added that the shortage of qualified personnel in the property industry was balanced by the number of experienced people.

Tondi raised concerns that a number of experienced people were nearing retirement age, and that industry would lose this experience.

He did point out, however, that a mentorship programme was being put in place to provide guidance to the young blood in the industry.

According to Tondi, although there were a number of challenges that still needed to be addressed, there were, nevertheless, expectations of government’s commitment to long-term lease agreements and government vigilance, which would guard against serial dealers and fronters.

In addition, there were high expectations that by increasing the number of BEE participants in the property industry and the alignment deals to the charter, the playing fields would be levelled much sooner.

Further, the property academy would address the skills and expertise shortage by making degrees and diplomas relevant to industry requirements.