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

OUTLINE OF PRESENTATION 1. SUMMARY OF HIRED BUILDINGS PER CLIENT DEPARTMENT AS AT SEPTEMBER 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 2010 Client 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 TOTAL89 “TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR”

Landlords Current status African Landlords ,73% Female Landlords % Indian Landlords % BEE Landlords % White Landlords % “TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR”

CURRENT Scenario Currently 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% “TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR”

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. TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR

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. TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR

FUTURE Scenario As 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% “TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR”

Proposed Three Year Transformation Plan African Landlords % Female Landlords % Indian Landlords % BEE Landlords % White Landlords % “TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR”

THREE YEAR PLAN ON PROPOSED TARGETS THE DEPARTMENT HOPES TO ACHIEVE THE PROPOSED TARGETS IN TERMS OF TRANSFORMATION AS SET OUT BELOW; TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR Target Group% % % AFRICAN LANDLORDS 5% FEMALE LANDLORDS 10% 5% INDIAN LANDLORDS 0%5%10% BEE LANDLORDS 10%5% WHITE LANDLORDS 0%5%10%

PROPERTY SECTOR TRANSFORMATION CHARTER The 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) TOWARDS TRANSFORMATION OF THE PROPERTY SECTOR

WAY FORWARD The 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”