Trade and industry minister, Rob Davies, said on Monday that the Amended Property Sector Code had become binding on entities and organisations operating in the property sector.

Davies approved the gazetting of the Amended Property Sector Code in terms of Section 9 of the Broad-based Black Economic Empowerment Act on 28 June. The Code was gazetted for public commentary towards the end of 2015.

The Amended Property Sector Code is applicable to commercial activities in the residential and commercial industries of the property sector, as well as the value chain which includes property development, property services, property and facility management, broking, valuation, estate agents and other professional services.

Recent reviews estimate that the South African property sector market size is about R5.8-trillion made up of commercial, residential, public sector, and zoned land sectors.

It is estimated that out of 38 000 estate agents, only 13 percent are black, and this is among the challenges that the Amended Property Sector Code seeks to address.    

Davies said even though the main focus of the code was not on land reform in South Africa, it should contribute towards reversing the legacy of the Native Land Act of 1913, and subsequent discriminatory policy and legislation which denied black people access to productive land and property.

He said in a statement that it should also contribute towards development and investment in the marginalised areas of the country.

“To achieve this, the Amended Property Sector Code has introduced a measurement indicator called Economic Development which aims to stimulate property development in under-resourced and marginalised areas, while in the process addressing inequalities and creating wealth amongst the previously disadvantaged groups,” Davies said.

“The set target is 10 percent of all annual investment for development or redevelopment.”

Davies further said that to accelerate an increase in ownership of black people in the sector, the Amended Property Sector Code has set a black ownership target of 27 percent for property owning companies.

“This is higher than the 25 percent black ownership target of the Generic Codes,” Davies said.

“In addition, and in recognition of the fact that there is a need to make capital available in the sector to enable black owned companies to develop and acquire properties, the amended sector code has set a target for established companies to financially support those that are at least 51 percent black owned.”