For the third consecutive year, property loan stock company Growthpoint leads the JSE's listed property sector in black economic empowerment (BEE) trends.
The largest listed property loan stock company in the country produced a total BEE score of 60,7% under the TEC data. That placed Growthpoint in the top spot within the sector followed by Ambit, with 56%. In third place Acucap claims a score of 41%.
Growthpoint owns a portfolio of commercial properties valued at about R27bn.
In 2003 the group clinched its first BEE deal valued at more than R1bn. This transferred about 14% of Growthpoint's linked units to a consortium of BEE groups, including one led by former National Prosecuting Authority head Bulelani Ngcuka.
That deal was followed by another BEE transaction that brought on board a group led by prominent black businessman Herman Mashaba, who then joined the group's board. He joined other black nonexecutive directors Ngcuka, Ragavin Moonsamy and Mzolisi Diliza.
Under the TEC data, Growthpoint claimed 15 points out of 20 on the ownership element. The black ownership points could have been more, were it not for the unique mode of expansion engaged in by property loan stock companies. It has expanded its asset base partly by issuing paper, which requires existing shareholders to follow up their rights - a clawback rights offer. As it happens, BEE groups lack the financial capacity to follow their rights, which then dilutes black shareholding as the group grows. To avert this dilution, management has tried to argue for a blanket once-empowered-always-empowered clause without success.
The group claimed only three points out of 10 in the management element. Its top executive management layer features only two black faces.
Its employment equity record is also not impressive. It scored 6,55% out of a possible 15 on employment equity. A promise to improve employment equity figures came with the group's transformation from an externally managed property fund into internal management. This came after Growthpoint bought the management rights from Investec Property Group for about R1,5bn. In June last year about 8,5m linked units worth R94m were distributed to staff members.
Moving out of a large institution like Investec required the group to embark on a big recruitment drive complemented by a skills development programme. The group has made a commitment to allocate 2% of its payroll towards skills development. Growthpoint skills spend was recorded at 1,2% of payroll in the TEC data.
The group scored 11,5 points out of 20 in preferential procurement. This comes after it launched an enterprise development initiative called The Property Point, which is undertaken in partnership with The Business Place. It is a programme to develop a black supplier base for Growthpoint. "The Property Point is all about training and supporting entrepreneurs who will develop their enterprises into fully independent firms that are able to compete effectively in the open marketplace," says Growthpoint CEO Norbert Sasse.
As a result of its efforts Growthpoint raked in all 15 points in the enterprise development element.
