PROPERTY SECTOR PRESENTATION SAFMA CONFERENCE

Transcription

1 PROPERTY SECTOR PRESENTATION SAFMA CONFERENCE 2014

2 UNDERSTANDING BBBEE & PROPERTY SECTOR CHARTER

3 Main Overview of BBBEE Transformation is a mechanism by government using Broad based Economic empowerment to enable the participation of the previously marginalised in the main stream economy! Charters are documents that guide the implementation of the process

4 Understanding BBBEE SA policy of BBBEE is NOT a moral initiative to address the imbalances of the past. It is a pragmatic growth strategy that aims to realise the country s full economic potential while helping to bring the black majority into the economic mainstream.

5 Understanding BBBEE BBBEE is NOT Affirmative Action, although Employment Equity forms part of it. Nor does it mearely take the from white people and give it to blacks. It is simply a growth strategy, targeting SA s weakest point: inequality. No economy can grow by excluding any part of its people. This threatens sustainability, growth etc.

6 Understanding BBBEE BBBEE strategy emphasis: Growth Development Enterprise Development Well implemented BBBEE sustainability Profitability Growth Global competitveness Innovativeness

7 Equitable economic opportunities Ownership equity The opportunity barrier Preferential procurement The business barrier Skills development The skills barrier BBBEE & IMPACT ON SA ECONOMY Management control Enterprise development Mainstream economy upper class Majority are white Wealthy with economic choices Business owners Upper middle class & investors High income Positive net asset value Invest in shares Majority are white Entrepreneur middle class Self employed Owner managed businesses Small Medium & Micro Enterprises Majority are white The professional middle class Formal employment (Black Diamonds) School leavers/graduates Artisans/professionals Good number of black since 1994 But majority is still white Employment equity The poverty barrier Socio Economic Development Second economy The majority are black With no economic earning ability No technical or tertiary skills Dependant on grants (Unemployable) Subsistence on land produce

8 BBBEE SECTOR CODES 2009 Construction Sector Code Tourism Sector Code Forestry Sector Code Transport Sector Code 2011 Chartered Accountants Sector Codes 2012 ICT Sector Codes Property Sector Code AgriBEE Sector Codes 2013 Financial Sector Codes

9 Who is Property Sector Council? PSCC was established in view of BEE initiative & objectives contained in the Act & Codes Major stakeholder in the property sector committed themselves to the transformation of the sector as envisaged in the DTI strategy for B-BBEE & according to the developed charter

10 Main objective of the Council? Oversee and monitor the implementation of property Charter with view to promoting transformation & B-BBEE within the Property Sector of the South African Economy!

11 UNDERSTANDING PROPERTY SECTOR

12 SCOPE OF THE PROPERTY SECTOR Commercial Property Industry Office Property Industry Industrial Property industry Retail Property Industry Leisure Property Industry Residential Property Industry Houses Freehold Lease Community schemes Flats, Clusters, Town Houses etc Zoned land

13 PHASE 1- RESEARCH PROPERTY MARKET SIZE South African property sector R4.9 trillion Non residential R780 billion Retail R340 billion Residential R3.0 trillion Public R570 billion National R188 billion Zoned urban land R520 billion Office R228 billion Industrial R187 billion Provincial R342 billion Local R37 billion Hospitality, leisure, other R25 billion SOE R6 billion

14 PHASE 2- RESEARCH The Impact of the South African Property Sector on the National Economy SOUTH AFRICAN PROPERTY SECTOR R Billion Non-Residential Property Industry Direct Expenditure R93.3 Billion R43.9 Billion Contribution GDP R191.4 Billion Total Taxes R46.5 TOTAL R237.8 Billion R80.8 Billion R25.3 Billion R106.1 Billion Residential Property Industry R46.0 Billion R103.7 Billion R20.1 Billion R123.8 Billion End of Cycle R3.3 Billion R6.8 Billion R1.1 Billion R7.9 Billion Note: All cost excluding VAT

15 REVISED CODES & ALIGNMENT OF THE PROPERTY SECTOR

16 Revised Codes of Good Practice The Generic scorecard adjusted in accordance with government key priorities Job Creation Supplier Development Localisation Industrialisation Skill Development All companies except Exempted Micro Enterprises to comply with all elements Old Codes New Codes Large entities All elements All elements QSE All elements All elements EME - -

17 CHANGES IN THE REVISION OF CODES There are 5 codes vs 7 codes Employment Equity and Management Control merged into one element: Management Control ( MC) Preferential Procurement and Enterprise Development merged into one element : Enterprise and Supplier Development (ESD) 5 Scorecard elements, total points increased from 100 to 109. Broad based groups elevated into the main Ownership scorecard

18 New Revised Codes New Scorecard has 5 elements & PSC is likely to have 6 elements Old Codes NEW PSC New Codes Ownership Management Control Employment Equity Skill Development Preferential Procurement Enterprise Development Socio-Economic Development Economic Development

19 Revised Codes of Good Practice The Generic scorecard adjusted in accordance with government key priorities Job Creation Supplier Development Localisation Industrialisation Skill Development All companies except Exempted Micro Enterprises to comply with all elements

20 REASON FOR REVISION OF CODES Introduced minimum requirements for priority elements: Ownership Skills Development Enterprise and Supplier Development QSEs to comply with at least two: Ownership (compulsory) ESD or Skills Development Large entities to comply with all priority elements; Entities who do not meet the thresholds in priority elements, the be discounted 1 level down

21 Revised Qualification points Scorecard points & Qualification criteria for awarding of B-BBEE status levels adjusted B-BBEE Contributor Status Current Qualification New Qualification Level One 100 points 100 points Level Two 85 but <100 points 95 but <100 points Level Three 75 but <85 points 90 but <95 points Level Four 65 but <75 points 80 but <90 points Level Five 55 but <65 points 75 but <80 points Level Six 45 but <55 points 70 but <75 points Level Seven 40 but <45 points 55 but <70 points Level Eight 30 but <40 points 40 but <55 points Non-Compliant <30 points <40 points

22 REVISED CODES & ALIGNMENT OF THE PROPERTY SECTOR

23 ALIGNED PROPERTY SECTOR CODE Current in the process of alignment Anticipate to gazette towards the end of the year.

24 THANK-YOU QUESTIONS??

25 NEW REVISED CODES & alignment process PROPERTY SECTOR CODE

26 OWNERSHIP OWNERSHIP INDICATOR WEIGHTING TARGETS Voting Rights Exercisable Voting Rights in the Enterprise in the hands of black people Excercisable Voting Rights in the Enterprise in the hands of black women 4 25% % Economic Interest of black people in the Enterprise 4 25% Economic Interest of black women in the Enterprise 2 10% Economic interest Economic interest of the following black natural people in the enterprise: 1. black designated groups; 2. black Participants in Employee Ownership Schemes; 3. black beneficiaries of Broad based Ownership Schemes; or 4. black Participants in Co-operatives 3 3% New entrants 2 2% Realisation points Net equity Value 8 Refer COGP Ownership is aligned to the DTI COGP No change

27 MANAGEMENT CONTROL CATEGORY BOARD PARTICIPATION OTHER EECUTIVE MANAGEMENT OWNERSHIP INDICATOR Exercisable Voting Rights of black board members as a % of all board members Exercisable Voting Rights of black female board members as a % of all board members Black Executive director as a percentage of all executive directors Black female Executive director as a percentage of all executive directors Black Executive management as a percentage of all executive directors Black female management director as a percentage of all executive directors COGP

28 MANAGEMENT CONTROL CATEGORY OWNERSHIP INDICATOR COGP MANAGEMENT DISABILITIES Black employees in the senior management as a % of all senior management Black employees in the senior female management as a % of all senior management Black Employees in the Middle management as a percentage of all middle management Black female Employees in the Middle management as a percentage of all middle management Black Employees in the Junior management as a percentage of all middle management Black female Employees in the Junior management as a percentage of all middle management Black employees with disabilities as a percentage of all employees

29 SKILL DEVELOPMENT OWNERSHIP INDICATOR WEIGHTING TARGETS Skill Development Expenditure Learnership, Apprenticeship Internship Bonus Skill development expenditure on learning programmes specified in the learning programme matrix for Black people as a % of leviable amount Skill development expenditure on learning programmes specified in the learning programme matrix for Black employees with disabilities as a % of leviable amount Number of black people participating in Learnerships, Apprenticeships and Internships as a percentage of total employees Number of unemployed black people participating in Learnerships, Apprenticeships and Internships as a percentage of total employees Number of black people absorbed by the industry at the end of the learnership programme 8 6% 4 03% 4 2.5% 4 2.5% 5 100% 25

30 Preferential Procurement ENTERPRISE & SUPPLIER DEVELOPMENT INDICATOR B-BBEE Procurement Spend from empowering Suppliers based on the B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend B-BBEE Procurement Spend from empowering Suppliers who are Qualifying Small Enterprises based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend B-BBEE Procurement Spend from All exempted Micro Enterprise based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend B-BBEE Procurement Spend from empowering suppliers that are al least 51% black owned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend WEIGHTING COGP WEIGHTING RES INDUSTRY TARGETS % % % % B-BBEE Procurement Spend from Value-Adding suppliers that are at least 30% black womenowned based on the applicable B-BBEE Procurement Recognition Levels as a percentage of Total Measured Procurement Spend %

31 ENTERPRISE & SUPPLIER DEVELOPMENT BONUS POINTS SUPPLIER DEVELOPMENT ENTERPRISE DEVELOPMENT BONUS POINTS INDICATOR B-BBEE Procurement Spend from designated group that are al least 51% black owned Annual value of all Supplier Development Contributions made by the Measured Entity as a percentage of the target. Annual value of Enterprise Development Contributions and Sector Specific Programmes made by the Measured Entity as a percentage of the target. Bonus point for graduation of one or more Enterprise Development beneficiaries to graduate to the Supplier Development level Bonus point creating of one or more jobs directly as a result of Supplier Development level & enterprise development initiatives by a measured entity WEIGHTING COGP WEIGHTING RES INDUSTRY TARGET S 2 2 2% % of NPAT 5 2 1% of NPAT

32 SOCIO-DEVELOPMENT CRITERIA Average Annual value of all socio-economic Development Contribution made by measured entity as a percentage of the target WEIGHTING TARGETS 2 1% of NPAT 2

33 THANK-YOU QUESTIONS??