The University of Cape Town’s (UCT’s) Department of Construction Economics and Management has partnered with Nedbank Corporate and Investment Banking (NCIB) to form the UCT-Nedbank Urban Real Estate Research Unit under the directorship of associate professor Francois Viruly.
The NCIB’s Property Finance business has made a commitment to invest R1-million a year into the unit for the next four years to help develop an interdisciplinary research platform that will identify issues within – and solutions to – urban real estate investment, as well as financial, economic and other problems in Africa.
Citing a report by professional services firm Jones Lang Lasalle, Nedbank stated that, while South Africa had about 15-million square meters of office space, the rest of Africa, including North and sub-Saharan Africa, only had about six-million square meters.
Analysts predicted, however, that the commercial real estate sector was “poised for lift-off” and that African cities would witness economic growth, with a urbanisation growth pushing 9% a year in some areas.
“The success and long-term sustainability of African cities is a function of vibrant property markets. It should be founded on an understanding of how these markets function and what they can be expected to deliver,” explained Viruly.
In addition to identifying issues in the sector, the research unit sought to develop an alliance between UCT, the property industry, and society at large to collaborate with public- and private-sector partners, thereby ensuring a community- and industry-aligned agenda. “This engaged research aims to ensure that the property sector is able to play its role in fostering the needs of investors and other stakeholders.
“There is a growing understanding that the performance of the built environment is not merely the outcome of economic growth, but has a critical role to play in creating the physical and social environment from which economies are able to prosper,” Viruly said.
He added that the risk of letting the African real estate sector boom take place without the accompanying research and understanding of property development was significant. “A great example of this was the 2008 global financial crisis, which clearly demonstrated the social risks of an unmanaged property boom,” he noted.
Meanwhile, a core research team in the Department of Construction Economics and Management, including associate Professor Kathy Michell and Rob McGaffin, had already been active in this area, conducting research into the challenges of developing high-density affordable housing in the inner-city of Cape Town. The team was also looking into the role of property markets in post-conflict countries and leveraging technology in the commercial real estate sector.
Meanwhile, NCIB property finance managing executive Robin Lockhart-Ross explained that investing and funding of property ventures and developments necessitated taking a long-term view that was properly informed. “The importance of high-quality real estate research in investment and financing decisions cannot be understated. “Both our association with UCT and commitment to research are consistent with our aspiration to promote thought leadership in the property industry.”