TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR PUBLIC WORKS PORTFOLIIO COMMITTEE MEETING OCTOBER 2010...

TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR

PUBLIC WORKS PORTFOLIIO COMMITTEE MEETING

OCTOBER 2010

HIRING PRESENTATION

OUTLINE OF PRESENTATION1. SUMMARY OF HIRED BUILDINGS PER CLIENT DEPARTMENT

AS AT SEPTEMBER 2010

2. LANDLORD CURRENT STATUS

3. CHALLENGES

4. FUTURE SCENARIO

5. PROPOSED TRANSFORMATION PLAN

6. WAY FORWARD“TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR”

Summary of on Hired Buildings as at September 2010Client Department

Number of Hiring cases per Department

Arts and Culture 6

Agriculture 16

Community Safety 1

Economic Dev 8

Education 20

Human Settlements 4

Premier 2

Transport 1

Sport & Recreation 4

Traditional. & Local Government 10

Social Development 12

Treasury 1

Public Works 4

TOTALTOTAL 8989“TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR”

Landlords Current status African Landlords----------15,73% Female Landlords-----------5.62% Indian Landlords-----------40.45% BEE Landlords--------------61.80%White Landlords------------33.71%

“TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR”

CURRENT ScenarioCurrently Indian Male Landlords dominate

the market by 40.45%This is followed by White Male Landlords by

33.71%The African Male Landlords stands at

15.73%Female Landlords which includes White,

Indian and African currently stands at 5.62%


Challenges Client Departments do not submit needs

timeously thereby placing this Department under pressure to renew with existing landlords.

Client Departments sometime still tend to negotiate with existing landlords on renewals which results in higher rate/m² and/or unfavorable terms and conditions.

There is limited office accommodation in remote areas which is not conducive to the spread of business to preferred participants.


Challenges contd,The transformation of the property sector in so far as landlord

profile is affected by the following to a large extent;■ ownership of property is still skewed due to a lack of access to funding.■ skills development is hampered by a lack of access to relevant information or lack of existing programs.■ Historical factors impacted negatively on the participation of women in the property sector which also includes ownership, control and management of buildings.■ Insufficient support to new or emerging entrant in terms of enterprise development.


FUTURE ScenarioAs a Department, we’ll like to commit to an

increasing the Female Landlords within the Province to 30%

The proposed transformation target for African Landlords is 30%, whilst the target for Indian Landlords will be 25%.

Thus giving a total of 85% BEE as opposed to the current status of 61.80%


Proposed Three Year Transformation Plan African Landlords----------30% Female Landlords-----------30% Indian Landlords-----------25% BEE Landlords--------------85%White Landlords------------15%


THREE YEAR PLAN ON PROPOSED TARGETSTHE DEPARTMENT HOPES TO ACHIEVE THE PROPOSED

TARGETS IN TERMS OF TRANSFORMATION AS SET OUT BELOW;


Target Group

% 2011-2012

%2012-2013

% 2013-2014

AFRICAN LANDLORDS

5% 5% 5%

FEMALE LANDLORDS

10% 10% 5%

INDIAN LANDLORDS

0% 5% 10%

BEE LANDLORDS

10% 5% 5%

WHITE LANDLORDS

0% 5% 10%

PROPERTY SECTOR TRANSFORMATION CHARTERThe Department's Transformation Strategy will have

to focus on the following pillars as contained in the Property Charter:▪ Property Ownership (Promote African Ownership)▪ Employment Equity (Implement transformation in respect of gender)▪ Skills development (Transfer of skills and internships)▪ Procurement (% target business to BBBEE)▪ Enterprise Development (Providing support to new and existing enterprises)


WAY FORWARDThe Bid Document in respect of Hiring of office

space has been adjusted to accommodate the set targets in terms of Youth in Refurbishment of hired Buildings.

Mentoring programme and partnerships of new entrants in the property market needs to be put in place.

The Department is also looking at ways to broaden the participation of Historically Disadvantaged Individuals in terms of lease management, cleaning and security services as well as full contract maintenance during the currency of the lease period.


TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR PUBLIC WORKS PORTFOLIIO COMMITTEE MEETING OCTOBER 2010...

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