PROGRESS REPORT ON THE PROPERTY SECTOR CHARTER Presentation to Portfolio Committee on Public Works 22 May

PROPERTY SECTOR - SCOPE 2 Property Sector – Residential Property Industry Houses Flats, Clusters, Town Houses etc – Commercial Property Industry Office Property Industry Industrial Property industry Retail Property Industry Leisure Property Industry

PROPERTY SECTOR - SCOPE 3 PROPERTY SECTOR UNIVERSE COMMERCIALRESIDENTIAL INDUSTRY OFFICES INDUSTRIAL RETAIL LEISURE COMMERCIAL RESIDENTIAL PROPERTY PRIVATE RESIDENTIAL PROPERTY FORMAL RESIDENTIAL INFORMAL RESIDENTIAL HOUSE TOWNHOUSES/FLATS CLUSTERS

PROPERTY CHARTER - SCOPE 4 Property Sector - Segments – Property Owners Institutions Private Property Loan Stock Association - PLSA Association of Property Unit Trust Companies - APUT – Property Services Facility Managers Property Managers Brokers Estate Agents – Professionals Valuers – Regulators – Government – Nedlac

PROPERTY CHARTER – COUNCIL MEMBERS Organisations/Associations – Government NDPW – National Department of Public Works – Regulators SACPVP – SA Council of Property Valuers Profession EAAB – Estate Agency Affairs Board – Owners PLSA – Property Loan Stock SA APUTS – Association of Property Unit Trust Stock – Professionals SABTACO – SA Black Technical Association Career BPVA – Black Property Valuers Association BPVA – Black Professional Valuers Association – Estate Agents IEASA – Institute of Estate Agencies of SA NPF– National Property Forum – Women AWIP – Association of Women in Property WNP- Women Network Properties – Others SAIBPP – SA Institute of Black Property Practitioners SAFMA – SA Facility Managers Association SAPOA – SA property Owners SACSC – SA Council of Shopping Centers 5

PROPERTY SECTOR Sector Size – Second biggest after mining —During the 5% growth, 1.5% was attributed to property 6 Values

PROPERTY SECTOR- VALUE 7

SETTING UP AND GAZZETING OF PROPERTY SECTOR CHARTER 8

PROPERTY CHARTER – process Initial stages- Phase 1 (Dec 03-Dec 04) – Set up structures – to initiate the process – The late Min Stella Sigcau launched the property charter process – July 2005 – Pulled all property Stakeholders together – Discussion Started around the scorecard – Initial drafting of the charter Secondary Stage – Phase 2 (Jan 05-Dec 05) – Further consultation – Setting up of steering committee team – Drafting of the charter – Signing of Charter – March 2006 – All stakeholders agreed in the formation of the Property Charter Council and signing of the constitution – October 2007 – Property Sector Charter under section 12 of B-BBEE Act was published – October 2007 – Property Charter Section 12 was gazetted – November 2007 – Property Charter published under section 9(5) Oct

 2007  All stakeholders agreed in the formation of the property charter council and signing of the constitution  Gazetted under Section 12  All stakeholders agreed in the formation of the property charter council  PSCC office set up  Council & board appointed  Appointed CEO  2010  Gazetted under section 9(5)  Opened for public comments & analysis period  2011  Analysis of public commentary  2012  Adjusted the targets to 6-10 targets  Gazetted under section 9(1) PROCESS FOR GAZETTING 10

OBJECTIVES OF THE PROPERTY SECTOR CHARTER 11

 Increase brand recognition and build PSCC as a respected authority  Execute the enabling model for the implementation of PSTC by stakeholders  Establish an efficient, effective & compliant PSCC organization  Develop an effective & efficient communication strategy both internally & externally  Develop information management capacity  Capacitate the organization with support staff KEY STRATEGIC OBJECTIVES OF

GORVENING STRUCTURES OF PROPERTY SECTOR CHARTER 13

PROPERTY CHARTER – Governance Corporate Governance Council members – All signatories of the constitution and gazetted Property Charter – Schedule meetings » Twice a year (dates agreed a year in advance) Board Members – Appointed by the council – Representative of different segments of the sector – Scheduled meetings » Once a quarter (4 times a year) – dates agreed a year in advance Exco Members – Appointed by the board (5 members) – Support the CEO with operational issues – Scheduled meetings » Once a month (12 times a year) – dates agreed a year in advance 14

PROPERTY SECTOR CHARTER COUNCIL COMPOSITION Composition and Seats of the Charter Council StakeholderRepresentingNumber of Seats Independent Chairperson 1 Nedlac/ Organised Indirect Stakeholders Women 5 Youth Labour Communities Public Sector All tiers of Govt. 5 SOEs Regulatory EAAB 2 SACPVP Other relevant interest groups participating in the property sector as decided by the Council. e.g Users12 associations1 Seat per association 15

THE PROPERTY CHARTER BOARD COMPOSITION Composition and Seats of the Charter Council StakeholderRepresentingNumber of Seats Chairperson Chairperson of the board 1 Nedlac/ Organised Indirect Stakeholders Women 1 Youth Labour Communities Disabled Public Sector NDPW 2 Ministry Property Services Facility Managers 3 Property Managers Brokers Estate Agents Professionals Owners Institutions 4 Private PLSA APUT Regulatory EAAB 2 SACPVP Women in Property WNP 1 AWIP 2 additional independent membersIndependent Members2 16

GOVERNANCE STRUCTURE COUNCIL MEMBERS BOARD MEMBERS EXCO CEO COMMITTEES Twice a year Quarterly/ Bi-Monthly Month project MEETING FREQUENCY 17

UNDERSTANDING PROPERTY SECTOR CODE 18

Ownership - 20 points Preferential Procurement - 20 pts Enterprise Development - 15 pts Employment Equity - 15 pts Skill Development -15 pts Control -10 pts SED -5 pts CODES OF GOOD PRACTICE 19

CODE OF GOOD PRACTICE These are the DTI Codes adopted in terms of the Generic Score Card; The sectors that do not have a Sector Transformation Charter use these; Sectors that have Sector Transformation Charters have to use sector code. They are allowed to deviate to accommodate sector specific issues; Deviations have to be discussed and agreed with DTI. 20

Code 000: Generic Codes ELEMENT PROPERTY SECTOR CODE CODES OF GOOD PRACTICE Ownership20 points Management control10 points Employment Equity15 points Skills Development15 points Preferential Procurement20 points Enterprise Development10 points15 points Socio-Economic Development2 points5 points Economic Development15 points TOTAL

Code 000: Generic Codes This is a comparison of Generic Codes with Property Sector Specific Codes – illustrating deviations – e.g. – Enterprise Development; – Economic Development. 22

DEVIATIONS: ECONOMIC DEVELOPMENT CRITERIA WEIGHTING POINTS COMPLIANCE TARGET Disposal of assets to B-BBEE enterprise (Level 1-3) as a % of total asset disposal (private) 835% Development Investment in under-resourced areas as a % of total annual investment 710% 23

IMPLICATIONS PROPERTY SECTOR CODE 24

– Every operation under the defined scope has to comply – Obligated to use the Property Sector Code Scorecard – No need to do 2 scorecards Only the Property Sector Charter will be recognised Effective immediately – i.e. no transition period – Need to use Accredited Verification Agencies or Accredited Auditors (Accredited by IRBA for BBBEE verification or SANAS) Analyse your status – Inception meeting explain the process – Identify the required information – Gather information – Analyse the information – Coupled with interviews and other methods of verification – Use the methodology to arrive at a status level IMPLICATION OF GAZETTING UNDER Sec 9(1) 25

LEVELBBBEE SCORE- property charter/codes WEIGHTING Level 1≥ 100 points135% Level 2≥ 85 but <100125% Level 3≥ 75 but <85110% Level 4≥65 but <75100% Level 5≥ 55 but <6580% Level 6≥ 45 but <5560% Level 7≥ 40 but <4550% Level 8≥ 30 but <4010% Not compliant<300% Where any enterprise is in excess of 50% owned by black people, the BBBEE Status of that enterprise will be at the level immediately above the level at which its actual score is evaluated BBBEE STATUS MATRIX 26

BASELINE & ANNUAL REPORTING 27

BASELINE SURVEY What is a baseline Survey – Survey designed to establish current status of the property sector in terms of transformation Objectives – Gives us base from where we are stating – Highlight area of focus and where PSCC can support – Monitor and report on progress – Generate industry and sector reports with authentic trends Tools – DTI IT portal accessed via internet – Portal has questionnaires - based in line with the Codes of Good Practice for Broad-Based Black Economic Empowerment – Portal is linked to all registered verification agencies 28

ANNUAL REPORTING Reporting is a gazettes function of all Sector Code – Frequency – annual main report Quarterly – smaller reports – Role – Monitor the trend – progress or lack thereof – Standardized Format – determined by DTI – Reports circulation Line Ministry The DTI PSCC Council members 29

Advocacy Work With the gazetting of the Property Charter Codes in terms of Section 9 (1) of the BBBEE Act, DPW in partnership with the Charter Council shall roll-out road- shows aimed at training and promotion on the property charter Codes – from August 2012; and Advocacy work will further target broader formal beneficiary organisations beyond current Charter Council representatives; Public Sector workshops on the implementation and alignment of state programmes with the Property Charter and related property transformation policies will be held with all spheres of Government and State Owned Enterprises (SOEs). 30

Government processes & alignment In support of the transformation of the industry through Property Sector Charter and internal BBBEE provisions, DPW has: -Developed and implemented a Property Management Strategy on BBBEE, Job Creation, and Poverty Alleviation: DPW empowerment programme to support transformation. -Developed the Property Incubator Programme (PIP) as an enterprise development programme: Creating protected environment for emerging property enterprises with work opportunities, training, mentorship and access to finance. 31

…Government processes & alignment contd -Developed Green Building Framework as part of growing the industry, entrenching international best practice, and ensuring sustainable environmental principles in the sector: Using state immovable assets to contribute to government’s effort to reduce carbon emissions. -Develop a Small Towns Development Strategy to ensure an inclusive property industry and improve economic activity: Identifying opportunities for empowerment for emerging property enterprises, cooperatives, job creation, etc. 32

WAYFORWARD PSCC: – Discuss the gazetting of the Charter in the forthcoming June Council meeting; – Agree on communication strategy: Launch of the Charter; Roadshows to Provinces. DPW: – Finalise the training manual for Government Department (all spheres) and state entities; – Begin roadshows; – Position the Department of report on the performance of the public sector; and – Continue to participate actively in the PSCC. 33

THE END 34 THANK YOU