Concerned about slow development processes in the Western Cape, the South African Property Owners Association (SAPOA) has commissioned a ground-breaking study into the value of the private property sector in the province – and the economic costs of inefficient property development processes.
Development economists UrbanEcon are currently assessing the size and scope of the private commercial and industrial property sector in the Western Cape and – more importantly – laying bare the risks associated with the property development process.
Preliminary numbers in the draft report entitled The Role and Impact of the Commercial Property Sector – Western Cape Province show the private property sector contributes significantly to the Western Cape economy.
The private property sector contributes nine percent to the provincial economy – or R23 billion in both construction and property management activities.
“What’s more, in 2011, private property management and private construction contributed R604 million and R341 million in provincial taxes, respectively,” says SAPOA CEO Neil Gopal.
The sectors also account for about 135,000 jobs in the provincial economy.
The study has two key goals, says Gopal.
The first is to accurately quantify both the size and scope of the commercial and industrial property sector in the province.
“We want to crunch the numbers and find out know what the sector’s economic value is,” he elaborates.
“Jobs, contribution to Gross Domestic product (GDP) and tax revenue generated are the key indicators we’re looking to understand.”
The second is to investigate the development process, and the time it takes, in the province.
A key element is unpacking the regulatory environment and tracking applications to pinpoint potential or actual delays.
“SAPOA is keenly aware that delays in the development process are a significant cost to developers and investors, and we want to understand the potential for economic risks in that process,” he adds.
SAPOA will release the full findings once the report is finalized.