Construction World May 2015

PROPERTY

BRINGING SMALL BUSINESS AND PROPERTY COMPANIES TOGETHER Property Point has already enabled South African small businesses to generate over R217,4-million in procurement opportunities and report revenue growth of 27,5% – well above the national average.

property industry. We’re now in a position to be a catalyst for further collaboration and partner- ships in enterprise and supplier development.” Theunissen believes enterprise develop- ment organisations can have a greater and more meaningful impact by joining together than by working in isolation or viewing other players in the space as competitors. By linking SMEs and procurement, the Property Point programme unlocks real supply chain opportunities, ensuring sustainable transformation and job creation. Its efforts have gained it a strong understanding of small businesses in South Africa as well as the goals and targets of enterprise development and procurement professionals. With its track record of success for supporting small businesses, Property Point has flourished to catch the attention of the industry at large. “Over the years, several property sector peers have shown interest in our model and approach. They’ve encouraged us along the way. Now we’re pleased to be in a position to share it with the industry,” says Theunissen. “We believe the programme has the potential for greater impact on a larger scale, and one of the proven ways of doing this is collaborating with like-minded leaders and organisations.” And it’s this spirit of collaboration that takes Property Point’s programme well beyond a question of compliance and into the realm of making an impact on the industry and the economy. “We are able to target interventions to help urbanisation (the majority of the world’s population now lives in urban areas); demo- graphic and social changes (including a significant rise in the number of older and elderly people); technology advancements; the rise of economic power in emerging markets (due largely to an expanding middle class); and climate change. PwC global real estate leader, Kees Hage, says: “There is a wall of capital targeting real estate opportunities in many markets across the globe. The search for better yields has taken some investors into development and secondary markets, moving them up the risk curve. But investors must strike a balance between the need to deploy capital and the ability to achieve good returns, at a time when there is such a difference in the economic conditions across the globe. “Real estate investors have a wide range of issues to consider when making invest- ment decisions. What is clear is that they

The programme has also created 904 jobs and empowered 2 500 people with best business practices. Plus, 43%

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of programme beneficiaries are black women owned enterprises and 95% of businesses continue operating sustainably after graduating from Property Point. Now Property Point is taking two new industry-changing steps. It is making itself available to partner with property businesses looking for a ready-to-go enterprise develop- ment platform that delivers excellent, targeted results. It is also calling for its next intake of entrepreneurs to join the ranks of the 86 busi- nesses that have already successfully partici- pated in its two-year incubation programme. With its roots as the enterprise development programme of South Africa’s largest JSE-listed Real Estate Investment Trust (REIT), Growth- point Properties, Property Point has been changing the face of the South African property industry one success story at a time since 2008. This Growthpoint initiative is now ready to effect even more transformation for the built environment by partnering with other property owners, developers and managers. Shawn Theunissen, head of Property Point and corporate social responsibility at Growth- point Properties, explains: “Since Property Point’s inception, it was always Growthpoint’s intent to create an initiative that fosters collab- oration and innovation in the industry.” He adds: “We’ve carefully grown Property Point, done our homework and created a winning recipe for enterprise success for the developed and many developing econo- mies. Levels of investment in real estate in Africa are low by a global standard, while significant challenges exist in exploiting potential opportunities. “However, our research suggests the impact of global megatrends on Africa will be huge. This will create a diverse range of opportunities for the real estate industry Africa – opportunities that often differ from those available in more developed markets.” The global impact of these trends are supported by the findings of a second report, Global Emerging Trends in Real Estate® 2015 , which is an annual forecast of global real estate investor sentiment published jointly by the Urban Land Institute (ULI) and PwC. The report, based on the views of senior global property investors, identifies several ‘megatrends’ affecting markets around the world, each of which has implications for development and investment: increasing

Shawn Theunissen, head of Property Point and corporate social responsibility at Growthpoint Properties.

develop SMEs based on our partners’ needs. Yet, the programme also drives economic transformation far beyond this. The quality of work from SMEs will improve, the businesses on the supply chain will be run at a higher level, and collaborative efforts have the potential to transform the property industry.” Property Point has just opened its next application window for entrepreneurs to join its incubation programme. It is looking for moti- vated individuals running SMEs that specialise in electrical work, hygiene services, plumbing, landscaping, pest control, air-conditioning, fire protection services, security, waterproofing, and painting. The entrepreneurs need to be based in or around Johannesburg; their businesses should be at least 51% black-owned (as per the Broad-Based Black Economic Empowerment Act of 2003); they must have operated for at least two years; and, offer services needed in the property industry. They must also be able to provide references and prior contracts of work, and prove that their business has the potential to grow and become a success. In addition, they cannot currently be on another incubation programme. may have to approach those decisions in a completely different way in the future. Capital allocations may need to be made to a wider range of asset types than ever before, ranging from retirement and student housing to data centres and self-storage.” Also for the first time Africa is included in the report. The report provides insight into of the current African real estate sector by focusing on the key markets through a series of interviews with leading players in the industry who provide their views and outlooks on the investment climate. French says: “As real estate inves- tors around the world are faced with the challenge of finding value and returns at a time when core property is becoming overpriced in almost all markets, Africa is now of increasing interest. We believe African real estate has unique drivers for growth, as highlighted in the two reports released by PwC.”

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CONSTRUCTION WORLD MAY 2015