Marketing & Media trends
Industry trends
Sponsors
Property trends
Auction industry survival depends on going virtual
Joff van ReenenCovid-19 drives new trends in local property market
Marcél du Toit
Agriculture trends
Automotive trends
Construction & Engineering trends
CSI & Sustainability trends
5 sustainability trends that will shape business in 2021
Christelle Marais4 trends set to continue or be re-interpreted in the NGO sector
Innocent MasayiraStrengthening NPO skills and processes
Nazeema Mohamed, Feryal Domingo and Soraya JoonasSustainability is key for social investment in 2021
Keri-Leigh Paschal
Education trends
4 trends in employee skills development and training you need to know for 2021
Siphelele Kubheka and Desikan Naidoo
Energy & Mining trends
Digital solutions need small steps to succeed
Xanthe AdamsMining looks ahead to more Covid risk
Ralf HenneckeMining's year ahead will demand deep innovation
Frederick Cawood
Entrepreneurship trends
Finance trends
10 predictions around fintech
Dominique CollettThe 4 themes for the new year
Andrew Duvenage,3 wealth management trends to watch in 2021
Maarten Ackerman4 strategies to rethink investing in SMEs
Kuhle MnisiMicroinsurance ready to reach new heights
Marius BothaFinding alpha in the age of Covid-19
Nema Ramkhelawan-BhanaPurpose or profit. It's not a choice
Mike MiddletonShifting towards a digital - but still human - approach
Henry van Deventer
Healthcare trends
Healthcare innovation in 2021 and beyond
Reynhardt UysAre day hospitals the new trend?
Lee Callakoppen3 emerging medical scheme membership patterns
Nerine BrinkHealthcare innovations to look out for
Moshe Lichtenstein
HR & Management trends
ICT trends
Legal trends
3 wide-ranging issues demanding legal attention this year
Jonathan Veeran, Nozipho Mngomezulu and Burton Phillips
Lifestyle trends
Wine in the wake of corona
Kristen Duff and Gosia Young7 prospects and necessary shifts for the arts
Rucera Seethal
Logistics & Transport trends
Marketing & Media trends
Tech democratisation will set the tone for 2021
Andrew Smit and Johan Walters
Retail trends
A challenging year anticipated for SA retailers
Tasmika RamlakanA bold year for beverages
Alex GlendayThe rise of D2C
Michael SmollanAcceleration of digital payments
Jonathan SmitSafety vs sustainability - the packaging industry's key conundrum
Nthabiseng MotsoenengThe evolving e-tail landscape
Vilo TrskaThe path forward for retail in 2021
Matthew Leighton
Covid-19
Property jobs
- Administrator/Assistant Pretoria
- Junior Project Co-Ordinator Cape Town
- Building Maintenance Officer Cape Town
Advertise your job ad on Bizcommunity
#BizTrends2021: Revitalising property markets through inner-city investment and refurbishment
South Africa's property sector, in general, has shown poor performance during the Covid-19 pandemic. Property stocks have taken a significant hit, where retail and commercial office space have been hit hardest and even some industrial property holdings have been affected. And none of these markets are showing signs of recovery yet.
Paul Jackson, CEO, TUHF |
Lower-income affordable housing – and inner-city housing in particular – has performed better than most other property markets in South Africa over the same period. Residential property as an asset class in South Africa, when compared with other international markets such as the US and Europe, is a very small sector. Hence, its performance in the face of the pandemic speaks to the resilience of inner cities, and the opportunities that lie in urban densification.
The urban densification imperative
Urban densification is a national imperative. It is happening, as part of a natural demographic trend that happens as countries develop. It happened in Europe in the 1700s, and in America in the 1800s, as people flocked to cities for better access to food, security, entertainment and services. It is now happening in Africa and South Africa is no exception. But South Africa’s urban development, and its approach to making housing investments in particular, have contributed to enormous and unsustainable urban sprawl as people continue to flock to urban areas and inner cities.
Urban densification is also happening at a much larger scale than people may believe. According to the Centre for Development and Enterprise (CDE), 70% of South Africa will be urbanised by 2030, with more than 60% of the country’s population urbanised already. However, it must be managed carefully to avoid creating urban decay in the process.
Why we should be making cities smart, rather than building new smart cities
Covid-19 has highlighted underlying vulnerabilities that undermine South African citizens' quality of life. These include growing inequality, limited and/or aging infrastructure, and a shortage of public resources to address these challenges...
Tijs van den Brink 25 Sep 2020
Meeting this challenge cannot be done with the traditional property development approach of building single, large scale and often comparatively expensive projects on the periphery of our cities. Due to space pressures within the existing urban landscape of most inner cities, urban densification must take the form of many less expansive projects that rely on ordinary people with local knowledge for their success. We are seeing small and medium-sized developers taking up opportunities to develop projects between R1m and R100m, and we expect this phenomenon will continue.
This means that metros will have to change their processes and redirect their capacities if they are to play a role in managing this trend and ensuring it happens in a way that enables and uplifts communities. Urban management and collaboration with private investors, and the communities themselves will be key to successful urban densification. Such collaboration can also free government resources up to focus on infrastructure development and town planning for these regenerated areas.
In this way, urban regeneration contributes to making better use of existing physical and social infrastructure, as well as promoting local economic development and thus inclusive economic growth.
Lessons from a pandemic: Future of urban design
As some of the world's biggest cities take on the challenge of being the epicentres of the Covid-19 pandemic, there is much debate about the future of cities and their 'design'...
Access to goods and services
Inner cities are multi-sector economies that, when managed well, attract pedestrians, commercial activity and reliable tenants and stimulate new businesses. Urban densification in South Africa continues to increase as people seek affordable, decent accommodation with access to physical and social infrastructure, as well as reduced commuting time and costs. The daily commute, for example, sees 20% to 40% of South Africans spending 2-3 hours of their day and 30% of their monthly income on getting to and from work.
As people increasingly move to the inner cities to reduce their living costs and/or gain access to better facilities and amenities, the opportunity to invest in inner-city rejuvenation and refurbishment projects increases. There’s room for smaller players in this space to take advantage of this trend by investing in multiple small projects – around 20 units at a time – and refurbish or repurpose existing buildings rather than investing in large-scale green fields projects that require sizeable tracts of open land to build.
A positive fiscal impact
The final driver behind inner-city investment is the knock-on effect on the greater economy. To put this into context, while RDP housing developments certainly serve an important purpose, these developments often have a net negative fiscal impact. They require additional services and ancillary infrastructure development in areas that have none, and people living in these developments often struggle to pay for services such as utilities, rates and taxes.
The future of urbanisation in a millennial, post-Covid-19 world
With 55% of the world's population already living in urban areas and numbers expected to increase to almost 70% by 2050, urbanisation continues to be a major watchword in the 21st century...
In contrast, a certain level of urban densification is necessary for economic and social action. It contributes to economic development at a micro level, which is by its nature inclusive. Stimulating the economy in localised spaces – one city block at a time – is critical to uplifting people from poverty. This is what we refer to as impact through scale – developments that bode real benefits in transformation through diversity, accessibility and economic inclusion. We, therefore, expect to see more investment in mixed-use developments in inner cities that are underpinned by this ethos and include retail, entertainment, educational and faith-based facilities rather than purely housing-focused developments.
This approach stimulates micro-economies in the immediate surroundings of a development so that urban densification largely has a net positive fiscal impact. It not only stimulates economic growth but attracts people that are more likely to be able to pay for services, rates and taxes. These projects also require less upfront investment, as they make use of existing infrastructure that can be refurbished or improved.
People are already investing in inner cities, financing important urban development to create urban densification projects. It is a phenomenon that is already shaping our urban areas. The market trend is extraordinarily positive, and for government and private investors, the opportunity lies in helping to ensure that these investments are regularised and contribute to inclusive wealth creation.
About the author
Paul Jackson, CEO, TUHF
Don't miss BizTrends2021 - 8 keynote speakers forecast trends shaping business in our region! Register now!
Read more: urbanisation, Paul Jackson, urban development, property development, urban infrastructure