10 March 2006
	PROPERTY Off TO a slow START By Sibonelo Radebe The industry does not have strong BEE credentials but talks are beginning

Johnnic Holdings, which landed on the property sector of the JSE by default, has claimed the first position in the sector in this year's Top Empowerment Companies. The former communications holding group transferred to the property sector after it collapsed its pyramid structure by distributing its holdings in media group Johnnic Communications (Johncom) to shareholders. That left Johnnic with a 100% stake in Johnnic Properties, a 28,6% stake in Durban-based casino and entertainment operation Sun Coast, 100% of Gallagher Estate and about 9,5% of the Tsogo Sun Group. Johnnic's majority shareholding has since been taken over by Hosken Consolidated Investments, which may alter its direction in the future. The fact that Johnnic leads the property sector with its minimal black economic empowerment (BEE) credentials proves one thing: empowerment is picking up slowly in this sector. In the sector rankings, Johnnic is followed by property loan stock company Alpina Investments, which scored zero on ownership. The same goes for its employment equity, skills development and preferential procurement. Alpina garnered some points on management, enterprise development and corporate social responsibility, which boosted its total BEE score to 24,33% compared with Johnnic's 50,37%. Alpina is one of the sector's smaller property-owning groups. The 2005 annual report quoted the value of its property portfolio at about R100m, but also announced plans to boost this portfolio to about R300m through an acquisition of Orion Group's R200m commercial property portfolio. Growthpoint has the largest property portfolio (R9bn) in net asset value terms in this sector, and R7bn market capitalisation. Ranked at position seven in its sector and 144 in the Top 200 ranking, Growthpoint concluded one of the most prominent BEE equity deals of 2005 and the largest to date in the property sector. The deal seeks to facilitate the transfer of 14,2% of Growthpoint's units to an empowerment consortium for about R1bn. It includes the sale of 14,2% in the Growthpoint management company from Investec to the consortium. The Mine Pensions Fund (MPF) and Investec have agreed to sell 100m of their Growthpoint-linked units to the BEE consortium.