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Change looms for the next big property cycle

Jul 14 2017 18:57
Carin Smith

Cape Town - There will likely be two important factors that will influence the next big cycle in the property sector, according to Associate Professor Francois Viruly, a property economist of Urban Real Estate Research Unit (URERU) at the University of Cape Town.

The first, in his view, is public transport.

"Those who understand public transport will understand the property sector," he said at a networking event of the SA Institute of Black Property Practitioners (SAIBPP) in Cape Town on Friday.

"Secondly, those who understand data will also understand what is happening in the property industry. For example, who saw the rise of Sandton or Century City coming?"

READ: 'Location no longer the most important property factor'

He said digitisation is coming to the property sector and will bring along a very specific business model - a model on which there is not yet a lot of clarity.

"We owe society the kind of research that it wants. We, therefore, see part of URERU's role as being a bridge between the private and public sector. If these two sectors work well together opportunities in the property sector - value capture, not state capture - can be explored," said Viruly.

"The business model of the property sector has not changed much since the World War II and the techies have realised this. The property sector will be the next sector they hit hard. The property broker probably has the same future as the travel agent - only the best will survive."

Empowered decisions

According to Richard Flame, Broll Property Group's director of facilities management, research is important in order to empower the decisions made not only in SA's property sector, but also in the rest of Africa.

"We cannot solve our problems with the same thinking we used when we created them," said Flame. "Research and the search for innovative solutions are very important."

SAIBPP CEO Vuyiswa Mutshekwane explained that SAIBPP was formed 22 years ago to address the under-representation of black people in the property sector. Members include commercial and residential property developers, property owners, service providers and those offering support functions. SAIBPP has chapters in the Gauteng, the Western Cape and KwaZulu Natal.

"We are trying to bring everyone around the table to see how the sector can grow in a sustainable and diverse way," she said. "It is not so much about people wanting to own a building anymore, but about tapping into the large value chain in the sector."

Mentoring and grooming the youth is, therefore, seen as an important focus for SAIBPP, apart from its primary focus of transformation advocacy, education, skills and business development.

"The state of transformation in the property sector has not met the targets set for it. Are we just doing a cosmetic exercise? I think it was like that in the past with just putting a couple of non-executive directors in place. That is not good enough anymore," she said.

"We are creating a platform where companies can find each other and form relationships of trust."

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uct  |  saibpp  |  property  |  sa economy

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