The role of the banks and the strategic response of the building industry

1 © BMI-BRSCU© BMI-BRSCU

TowardsMaking sense of the Building Industry:

The Role of the Banks and the Strategic Response of the Building Industry.

Dr. Llewellyn B. LewisDr. Llewellyn B. LewisMarch 2011March 2011

THE STRATEGIC FORUMTHE STRATEGIC FORUM

A place of assembly for strategic conversations

BMI

Studium Ad Prosperandum

Voluntas in Conveniendum

BUILDING RESEARCHSTRATEGY CONSULTINGUNIT cc

Reg. No. 2002/105109/23

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Paradigm

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Critical mass of Investors

(Whole community)

Single Investor (Part of community)

Paradigm

Pioneer

Early adopter

Paradigm shift

LateAdopter

Bandwagon Flocking

Herd behaviourImpact of Change and

transformation

All Countries

(Whole World)

Single

Country

(Part of World)

THE LOCAL PROPERTY THE LOCAL PROPERTY MARKETMARKET

LIMITS TO LIMITS TO GROWTHGROWTH

PARADIGMS PARADIGMS CHALLENGEDCHALLENGED

ALTERNATIVE ALTERNATIVE INVESTMENTSINVESTMENTS

REINVENTIONREINVENTION A Structural A Structural

Change?Change? Self OrganisationSelf OrganisationOrder for Free!Order for Free!

Property a Property a preferred preferred

Investment!Investment!





THE GLOBAL THE GLOBAL PROPERTY PROPERTY

ENVIRONMEENVIRONMENTNT

DEMISEDEMISE THE THE

PROPERTY PROPERTY BUBBLE?BUBBLE?

THETHEEDGE OF CHAOSEDGE OF CHAOS

CREATIVITYCREATIVITYINNOVATIONINNOVATION

The current and known world The future, unknown

THE PROPERTY MARKET AND COMPLEXITYTHE PROPERTY MARKET AND COMPLEXITY


Paradigm

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(Whole community)


Paradigm

Pioneer

Early adopter

Paradigm shift

LateAdopter

Bandwagon Flocking


transformation

All Countries

(Whole World)

Single

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(Part of World)





















Contagious

stories


Paradigm

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(Whole community)


Paradigm

Pioneer

Early adopter

Paradigm shift

LateAdopter

Bandwagon Flocking


transformation

All Countries

(Whole World)

Single

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(Part of World)





















Individual

BanksPublic

opinion

MinistryTreasury

IMFWorld Bank

Contagious

stories


Total Mortgage Advances: 2002 - 2009The Strategic Forum Scenarios: 2010-2020(Source: SARB; MFA DATABASE, BMI-BRSCU Workings)

4570

22

2968

84

1948

56

2210

00

2850

00

3500

00

4350

00

4550

00

4500

00

4250

00

3850

00

3900

00

4050

00 4550

00

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000

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800,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

R M

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High Road New York Scenario: 2010-2020

Higher Middle Road London Scenario: 2010-2020

Lower Middle Road Sao Paolo Scenario: 2010-2020

Low Road Harari Scenario: 2010-2020

Sao Paolo Scenario:2010-2020

Sao Paolo Scenariois Current

Most likely future Scenario

R305 Billion decline in

only 3 years!

It could take a decade to get

back to the 2006 level!



The recovery will be gradual The Building Industry can Change fundamentally New consumption patterns will be less centred around houses and cars Home ownership under threat Rental preferred to ownership Housing Units will be smaller But could favour rental and new forms of living, eg Townhouses and High Rise Flats, walkable neighbourhoods More job mobility requiring flexibility Transition to the Knowledge Economy – could affect Industrial and Warehousing developments People working at home and desk sharing – affecting Office development Infrastructure Investment crucial in new forms of public transport, Traffic congestion and gridlock forcing new working and living models A radically altered and much denser economic landscape organized around megaregions New types of inner cities with people walking to work Spatial fix involves Integrated, Sustainable developments where people live work and play


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Low Low High HighPOWERPOWER

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PLAYERSPLAYERSDemand creatorsDemand creatorsFuture orientedFuture orientedProactiveProactiveInnovativeInnovativeEntrepreneurialEntrepreneurialRisk TakersRisk Takers

RESERVESRESERVESDemand RespondersDemand RespondersCurrent orientationCurrent orientationReactiveReactiveResponsiveResponsiveService orientedService orientedRisk ManagersRisk Managers

ONLOOKERSONLOOKERSDemand observersDemand observersPast orientationPast orientationPassivePassiveRisk AvoidersRisk Avoiders

REFEREESREFEREESDemand FacilitatorsDemand FacilitatorsCurrent orientationCurrent orientationReactiveReactiveResponsiveResponsiveMediatingMediatingGatekeepersGatekeepersRisk AverseRisk Averse

BYSTANDERS ACTORSBYSTANDERS ACTORSBuilding Industry Stakeholder AnalysisBuilding Industry Stakeholder Analysis

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PLAYERSPLAYERSCommittedCommittedIn the KnowIn the Know

RESERVESRESERVESInvolvedInvolvedKeep InformedKeep Informed

CROWDCROWDInterestedInterestedMinimal EffortMinimal Effort

REFEREESREFEREESConcernedConcernedKeep SatisfiedKeep Satisfied

BYSTANDERS ACTORSBYSTANDERS ACTORSBuilding Industry Stakeholder AnalysisBuilding Industry Stakeholder Analysis


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BYSTANDERS ACTORSBYSTANDERS ACTORS


PLAYERSPLAYERSProperty Entrepreneurs, Property Entrepreneurs, developers, developers, Public Sector,Public Sector,FINANCIAL FINANCIAL INSTITUTIONSINSTITUTIONS(Mortgage Origination, (Mortgage Origination, Approval, Approval, Advances, Advances, Properties in Possession, Properties in Possession, Auctions)Auctions)

RESERVESRESERVESArchitects, Specifiers,Architects, Specifiers,Manufacturers, Manufacturers, Distributors,Distributors,Contractors,Contractors,FINANCIAL FINANCIAL INSTITUTIONSINSTITUTIONS(Deposits, Repayments, (Deposits, Repayments, Insurance, cross selling) Insurance, cross selling) CROWDCROWDLabour, Labour, Unions,Unions,Consumer bodies,Consumer bodies,FINANCIAL FINANCIAL INSTITUTIONSINSTITUTIONS(Property Values, Property (Property Values, Property reports (HPI), Statistics)reports (HPI), Statistics)

REFEREESREFEREESGovt Prov-, Local-Govt Prov-, Local-Authorities, CIDB, NHBRC, Authorities, CIDB, NHBRC, SABS, Agrement Board, SABS, Agrement Board, MBA’S, SARB, State MBA’S, SARB, State Tender Board,Tender Board,FINANCIAL FINANCIAL INSTITUTIONS INSTITUTIONS (Valuations, LTV ratios, (Valuations, LTV ratios, Mortgage Rate, term, Mortgage Rate, term, Affordability)Affordability)

Building Industry Stakeholder AnalysisBuilding Industry Stakeholder Analysis


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Building Industry Stakeholder AnalysisBuilding Industry Stakeholder AnalysisFinancial Institutions have INORDINATE Power and Interest. They play in all the quadrants of the Stakeholder Matrix and are SIMULTANEOUSLY PLAYERS, RESERVES, REFEREES and CROWD.They make the rules of the game and influence every facet of it.


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Lanice Steward, MD of Anne Porter Knight Frank, says it is time that the regular bank reviews gave a more balanced picture of South African residential property."These bank surveys are widely consulted and

referred to and are highly influential. Where, it seems to me, they fall down is that they tend to reflect only the price moves on homes for which their bank has issued mortgage bonds.” (Business Day, 8 Feb 2011)


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RESERVESRESERVESArchitects, Specifiers,Architects, Specifiers,Manufacturers, Manufacturers, Distributors,Distributors,Contractors,Contractors,FINANCIAL FINANCIAL INSTITUTIONSINSTITUTIONSDeposits, Repayments, Deposits, Repayments, Insurance) Insurance) CROWDCROWDLabour, Labour, Unions,Unions,Consumer bodies,Consumer bodies,FINANCIAL FINANCIAL INSTITUTIONSINSTITUTIONS(Property Values, Property (Property Values, Property reports (HPI), Statistics)reports (HPI), Statistics)



COMPETING WITH THEIR CUSTOMERS – AND THE

BUILDING INDUSTRY?

A property becomes a Property in Possession (PIP) or Bank Repossessed Property, once a customer has defaulted and the bank's reserve price was not achieved at auction.Maintaining these properties is expensiveThe sale of PIP’s is in order to recover costs.

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We understand that homes are expensive these days. That’s why FNB offers you Bank repossessed properties at hugely discounted prices. All prices are negotiable. FNB Homeloans also offers loans up to 100% and there are no transfer duties payable.

The properties are predominantly situated in what could be described as Middleclass areas. These areas are predominantly areas with an average property price of R300 000 – R650 000.

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ABSA strategy in Repossession market powered by www.MyRoof.co.za

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Standard Bank strategy in Repossession market.

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NEDBANK strategy in Repossession market.

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“Are we making the same mistake again, not to see a crisis in the making?”

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How can we create an environment that gives us the leverage to influence the Financial Institutions?

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Relationships and tools that can be used to manipulate a crisis have to be prepared for years – sometimes decades – in advance.

This reflects (Holling’s) belief that in a changing eco system the persistence of relationships matters more than anything else.

That’s a reason that the re-acquiring of habits of . . . cooperation in everything . . . is so essential.

It lets us begin to rebuild the webs of contacts, influence, and leverage to shape the environment around problems that we’ll never be able to attack directly. (Ramo: 2009: 214)


There can be no return to high levels of employment and growth without finding a way of harnessing finance’s creative energies to allocate resources and risk so effectively that it spurs and speeds economic growth.

We must never forget that credit, and the need for securitisation too, is at the heart of a modern financial system. (Gordon Brown: 2010: 109)

There is a compelling need for wide Stakeholder collaboration to address common problems.


Animal Spirits drive almost everything. Animal Spirits are more than just confidence as measured by confidence indicators.

Declining Animal Spirits are the principal reason for the recent severe economic crisis.

And despite the recent positive

economic indicators, we see no clear indication that these spirits are yet revived. (Akerlof and Shiller: 2009: vii)

ANIMAL SPIRITS AND CONFIDENCEwww.strategicforum.co.za

We are facing the same problem today that we faced in the later years of the Great Depression – business today is inhibited by uncertainty about the future, about the tolerance of an angry public, about a disaffected labour force, and about what further government actions may be coming.

Animal Spirits are the forces that drives all of this, and to understand animal spirits we have to use methodologies outside of traditional economics, leading us to other social sciences.

Five psychological factors are of particular importance;

1. Confidence;2. Fairness;3. Corruption and bad faith;4. Money illusion; and

5. Stories. (Akerlof and Shiller: 2009: ix)

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Non EconomicNon Economic EconomicEconomicMOTIVESMOTIVES

Conventional Economic Conventional Economic TheoryTheory

Economic theory Economic theory incorporating “Animal incorporating “Animal Spirits”. Spirits”.



How the Macro Economy behavesHow the Macro Economy behaves


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Conventional Economic Conventional Economic TheoryTheory






Akerlof & Shiller believe that the answers to the most important questions regarding how the macro economy behaves and what we ought to do when it misbehaves lie largely (though not exclusively) within the three white boxes)

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• The current model fills only the top right hand box; it The current model fills only the top right hand box; it answers the question: answers the question: How does the economy behave if How does the economy behave if people only have economic motives and if they people only have economic motives and if they respond to them rationally?respond to them rationally?•But that leads immediately to three more questions, But that leads immediately to three more questions, corresponding to the three blank boxes: corresponding to the three blank boxes: How does the How does the economy behave with non-economic motives and economy behave with non-economic motives and rational responses? With economic motives and rational responses? With economic motives and irrational responses? With non-economic motives and irrational responses? With non-economic motives and irrational responses? irrational responses? •Akerlof & Shiller believe that the answers to the most Akerlof & Shiller believe that the answers to the most important questions regarding how the macro economy important questions regarding how the macro economy behaves and what we ought to do when it misbehaves behaves and what we ought to do when it misbehaves lie lie largely (though not exclusively) within those three largely (though not exclusively) within those three blank boxes)blank boxes)•Their description of the economy fits the Their description of the economy fits the qualitative as qualitative as well as the quantitative facts,well as the quantitative facts, better than a macro- better than a macro-economics that leaves out irrational behaviour and non-economics that leaves out irrational behaviour and non-economic motives.economic motives.•Thus, they occasionally use statistics but for the most Thus, they occasionally use statistics but for the most part, rely on history and on part, rely on history and on stories. stories. (Akerlof & Shiller: (Akerlof & Shiller: 2009: 168)2009: 168)



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Conventional Economic TheoryConventional Economic TheoryEconomic theory incorporating Economic theory incorporating ““Animal SpiritsAnimal Spirits””. .

Economic theory incorporating Economic theory incorporating ““Animal SpiritsAnimal Spirits””. .

Economic theory incorporating Economic theory incorporating ““Animal SpiritsAnimal Spirits””. .

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The MFA CLIBI has moved sideways for four quarters, still reflecting widespread pessimism in the South African building industry … this is the first time that it has moved sideways for more than two quarters, an unprecedented occurrence … a recovery-in-waiting?

MFA COMPOSITE LEADING INDICATOR (CLIBI)FOR THE SOUTH AFRICAN BUILDING INDUSTRY

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100

| 71 | 74 | 77 | 80 | 83 | 86 | 89 | 92 | 95 | 98 | 01 | 04 | 07 | 10 | 13

Source: FNB / BER; SARB; MFA DATABASE

PE

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IMIS

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OPTIMISM

PESSIMISM


?



A confident prediction is one that projects the future to be rosy; an unconfident prediction projects the future as bleak.

But if we look up confidence in the dictionary, we see that it is more than a prediction. The dictionary says that it means “trust” or “full belief”.

The word comes from the Latin “fido”, meaning “I trust”.

The confidence crisis that we are in at the moment is also called a “credit crisis”. The word “credit” derives from the Latin “credo”, meaning “I believe”. (Akerlof and Shiller: 2009: 12)

If this is what we mean by confidence, then we see immediately why, if it varies over time, it should play a major role in the business cycle. Why?

In good times, people trust. They make decisions spontaneously. They know instinctively that they will be successful. They suspend their suspicions.

Asset values will be high and perhaps also increasing. As long as people remain trusting, their impulsiveness will not be evident.

But then, when the confidence disappears, the tide goes out. The nakedness of their decisions stand revealed.

When people are confident, they go out and buy; when they are unconfident they withdraw, and they sell.

Economic history is full of such cycles of confidence followed by withdrawal (Akerlof and Shiller: 2009: 12,13)

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For some reason in the late 1990s and early 2000s, the idea that homes and apartments were spectacular investments, gained a stronghold on the public imagination in the United States and many other countries as well.

Not only did prices escalate, but there was palpable excitement about real estate investments; one could see the animal spirits in action everywhere.

It was the biggest home price boom in U.S. history. It extended over nearly a decade, beginning in the late 1990s.

Prices nearly doubled before the bust began in 2006. While it lasted, this spectacular boom mirrored in other countries as well, helped drive the entire world economy and its stock markets.

In its wake, it has left the biggest real estate crisis since the 1930s. The so-called sub-prime crisis, as well as a global financial crisis, the full dimensions of which still have to be grasped. (Akerlof and Shiller: 2009: 149)

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For some reason in the late 1990s and early 2000s, the idea that homes and apartments were spectacular investments, gained a stronghold on the public imagination in the United States and many other countries as well.

Not only did prices escalate, but there was palpable excitement about real estate investments; one could see the animal spirits in action everywhere.

It was the biggest home price boom in U.S. history. It extended over nearly a decade, beginning in the late 1990s.

Prices nearly doubled before the bust began in 2006. While it lasted, this spectacular boom mirrored in other countries as well, helped drive the entire world economy and its stock markets.

In its wake, it has left the biggest real estate crisis since the 1930s. The so-called sub-prime crisis, as well as a global financial crisis, the full dimensions of which still have to be grasped. (Akerlof and Shiller: 2009: 149)

The story of the time . . .

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And then the story changed . . .

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A final problem dogging the market is that, in response to the financial crisis and the subsequent changes in liquidity requirements, banks have tightened their lending criteria and so fewer people now qualify for home loans. Therefore, even though rates are at multi-year lows, lending remains subdued.

Thanks to this perfect storm, it seems unlikely that the US housing market will recover any time soon. Indeed, further falls may well be on the cards. (Moneyweb, 31 May 2011)

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With employment prospects uncertain, people are less willing to take on new mortgage debt and less able to service their existing debt - the foreclosure rate remains elevated - thus keeping prices depressed.

Furthermore, many people are opting to rent, rather than buy, in order to avoid binding themselves to a particular geographic location; they want to be able to move to wherever the jobs are. (Moneyweb, 31 May 2011)

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A recent survey of 8000 Britons aged 20 to 45 found that more than three-quarters who don’t own property would like to, but 64% believe their chance of doing so is nil.

In Germany only 39% own the homes that they live in compared with about 60% in Britain and 50% in France. In South Africa some 80% own their homes, but this is likely to change in future. (The Independent, 31 May 2011)

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Nominal house price growth(80m²-400m², ≤R3,1 million)

(Source: ABSA HPI, Q4 2010)

-5

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00 01 02 03 04 05 06 07 08 09 10

Small

Medium

Large

In South Africa the story is similar.

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JOHANNESBURG - The Consumer Protection Act which comes into effect on April 1 2011, has raised several concerns, among them the lack of protection for landlords who feel the new legislation will offer them little recourse in the way of defaulting tenants.

The Act provides ample protection to investors and homeowners in their dealings with unscrupulous estate agents. However, some landlords feel the legislation leaves them in the lurch.

Abandon all hope in property. (?)

That is a rather brutal summary of the outlook for residential, commercial and industrial property described by First National's property guru John Loos and veteran property analyst Erwin Rode (pictured) at a symposium in Johannesburg. (David Carte writing on Moneyweb, 30 March 2011)

Who will build Rental housing?

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Adding to Consumer uncertainty and HOPELESSNESS?

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Do overseas Investors have a different, longer-term view of prospects for Property inSA??

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Stage 1Hubris bornOf success

Stage 2Undisciplined

Pursuit of More

Stage 3Denial of Risk

and Peril

Stage 4Grasping for

Salvation

Stage 5Recovery and

Renewal

WELL FOUNDED HOPE

STRATEGIC DRIFT AND REINVENTIONwww.strategicforum.co.za

(Source: Based on Collins: How the Mighty Fall: 2009)


Stage 1Hubris bornOf success

Stage 2Undisciplined

Pursuit of More

Stage 3Denial of Risk

and Peril

Stage 4Grasping for

Salvation

Stage 5Recovery and

Renewal

WELL FOUNDED HOPE

?

What will it take?

(Source: Based on Collins: How the Mighty Fall: 2009)

What can we do to What can we do to restore growth when one restore growth when one part of the Industry wants part of the Industry wants to save (and not spend) to save (and not spend) and the other wants to and the other wants to stop spending (and stop spending (and save)?save)?

BPP and BC


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Total Building Net Building in the Pipeline (NBIP): 1993-2010: BC and Ideal NBIP (INBIP) by Month: 1993-2009: R*1000 (Current Values) (Jan)

(Source: StatsSA, BMI-BRSCU: BC Total RSA by Month and Type of Building1993-2008: NBIP (BPP-BC): Chart 16)

-1,000,000

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

19

93

19

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19

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Total Building NBIP (BPP-BC) Total Building BCTotal Building INBIP 12 per. Mov. Avg. (Total Building NBIP (BPP-BC))12 per. Mov. Avg. (Total Building BC) 12 per. Mov. Avg. (Total Building INBIP)


Can the Building Industry TRANSFORM and

REINVENT itself – can it recover?

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New mortgage loans and readvances by month and application: 1993-2009 (September)(Source: SARB, BMI-BRSCU Workings)

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/07

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/07

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New mortgage loans and re-advances applied on existing buildings

Gross new mortgage loans and re-advances for construction of buildings

Net new mortgage loans and re-advances applied on vacant land

12 per. Mov. Avg. (New mortgage loans and re-advances applied on existing buildings)


It will FUNDAMENTALLY depend on the strategy of

the FINANCIAL INSTITUTIONS.

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PLAYERSPLAYERSProperty Entrepreneurs, Property Entrepreneurs, Property developers,Property developers,Public Sector,Public Sector,Building IndustryBuilding Industry

RESERVESRESERVESArchitects, Specifiers,Architects, Specifiers,Manufacturers, Manufacturers, Distributors,Distributors,Contractors, Financial Contractors, Financial Institutions,Institutions,Building IndustryBuilding Industry

CROWDCROWDLabour, Labour, Unions,Unions,Consumer bodies,Consumer bodies,Building IndustryBuilding Industry

REFEREESREFEREESGovt, Provincial, Local-Govt, Provincial, Local-AuthoritiesAuthoritiesCIDB, NHBRC, SABS, CIDB, NHBRC, SABS, Agrement Board, MBA’S,Agrement Board, MBA’S,SARB, State SARB, State Tender Tender Board,Board,Building IndustryBuilding Industry


Think “outside the box”. Change the “rules of the game”.Become a PRO-ACTIVE PLAYER in each of the quadrants of the Stakeholder Matrix.

How can we create an environment that gives us the leverage to influence the Banks?


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PLAYERSPLAYERSProperty Entrepreneurs, Property Entrepreneurs, Property developers,Property developers,Building IndustryBuilding Industry(Mortgage Origination, (Mortgage Origination, Approval, Advances, Approval, Advances, Repossessions, Auctions)Repossessions, Auctions)

RESERVESRESERVESArchitects, Specifiers,Architects, Specifiers,Manufacturers, Manufacturers, Distributors, Financial Distributors, Financial Institutions.Institutions.Building IndustryBuilding Industry(Contractors, Deposits, (Contractors, Deposits, Repayments, Insurance)Repayments, Insurance) CROWDCROWDLabour, Labour, Unions,Unions,Consumer bodies,Consumer bodies,Building IndustryBuilding Industry(Property Values, Property (Property Values, Property reports (HPI), Statistics)reports (HPI), Statistics)

REFEREESREFEREESGovt, Prov-, Local-Govt, Prov-, Local-AuthoritiesAuthoritiesCIDB, NHBRC, SABS, CIDB, NHBRC, SABS, Agrement Board, MBA’S,Agrement Board, MBA’S,SARB, State Tender SARB, State Tender Board,Board,Building IndustryBuilding Industry (Valuations, LTV ratios, (Valuations, LTV ratios, Mortgage Rate, term, Mortgage Rate, term, Affordability, Quality)Affordability, Quality)

BYSTANDERS ACTORSBYSTANDERS ACTORSDevelop an Igniting INDUSTRY Vision and a Grand Strategy: Promote Building as the engine for growth, nation building and wealth creation through Property Ownership.

Develop an Igniting INDUSTRY Vision and a Grand Strategy: Promote Building as the engine for growth, nation building and wealth creation through Property Ownership.

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Productive capacity

Alliances,Joint

Ventures

Cross functional

Networking

Enterprise Development,

BEE

Skills Training and Development

Leadership,Lobbying,Advocacy

Modeling cooperative behaviour

REINVENTION

The Hot Spot Scenario: mapping emergence(Based on Gratton: 2007: 145)

Management Training and Development

INDUSTRY

Government Labour

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Productive capacity

Alliances,Joint

Ventures

Cross functional

Networking


BEE

Skills Training and Developmen

t



REINVENTION



INDUSTRY

Government Labour

Who in the building and property industry is driving a vision of any description? Is there even a vision at all?

Who will appropriate the role to champion the cause to promote nation-building through home-ownership, property as a preferred investment and building as an engine for growth and wealth-creation? And WHO WILL ADVOCATE THE HOPES AND DREAMS of millions of homeowners (and that of an industry that employs over one million people)?

The more peers we can bring online for the business of saving the world, the easier the effort will be, and in a sense, the stronger we will each be. (Ramo: 2009: 240)

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Productive capacity

Alliances,Joint

Ventures

Cross functional

Networking


BEE

Skills Training and Developmen

t



REINVENTION


Building: The Engine for Growth and Wealth Creation. Property a preferred investment


INDUSTRY

Government Labour

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We have concluded that it is not one single body or institution or company that should develop and drive an igniting vision for the building industry.

The industry COLLECTIVELY must take ACCOUNTABILITY to develop an igniting vision of Nation Building through Home Ownership, Property as a Preferred Investment and Building as an Engine for Growth and Wealth Creation.

We envision that every major organisation in the Building Industry from Development to Manufacturing, to Distribution, to Contracting and Finance should adopt this overarching vision and customise it for their

own vision (see example of Claybrick.org overleaf).

Then the Building and Property Industry will indeed become a HOT SPOT industry driven by an igniting vision, a collaborative mind-set, cross boundary networking and the productive capability to make South Africa a Winning Nation. Then a repetition of the sub-prime crisis will not catch a cooperating industry unawares.


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NATIONAL ISSUES

GROWTH WEALTHEMPLOYMENT PROPERTY

ORGANISATION’S ROLE

INVESTMENT ENVIRONMENT

MARKETING LOGISTICS

VISIONBuilding is the engine for growth and wealth creation through Property Ownership and THE ORGANISATION is the preferred Partner for good as the green BUILDING solution of choice.

MANUFACTURING

BUILDING INDUSTRY AN ENGINE OF GROWTH

REINVENTIONDoing well while

doing good.

REINVENTIONDoing well while

doing good.

YESTERDAY’S ECONOMY

TOMORROW’SECONOMY

NARROW FOCUS ON COMPANY

NARROW FOCUS ON COMPANY

BROAD FOCUS ON CONTRIBUTION TO NATIONAL ISSUES

BROAD FOCUS ON CONTRIBUTION TO NATIONAL ISSUES

Overarching INDUSTRY vision aligned with National Issues, adapted and customised by the organisation for their own vision and values. MISSION

Developing and growing competitive awareness, knowledge and support of END USERS and maintaining consistent standards in the environmentally friendly production of PRODUCTS for good value and performance in building.

VALUESThe Organisation has an igniting vision, a culture, or mind set of co-operation, collaboration and cross-boundary networking; and a production capability to facilitate delivery of fit for purpose products and

solutions and based on the unashamedly ethical values and code of conduct of:• Respect• Responsibility• Honesty• Integrity• Accountability• Collaboration

BORROWBUY BURN

ENVIRONMENTALSUSTAINABILITY

SOCIALSUSTAINABILITY

ECONOMICSUSTAINABILITY



TowardsBuilding: The Engine for Growth and Wealth Creation

Dr. Llewellyn B. LewisDr. Llewellyn B. LewisMarch 2011March 2011

THE STRATEGIC FORUMTHE STRATEGIC FORUM

A place of assembly for strategic conversations

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Real Estate

The role of the banks and the strategic response of the building industry