TRENDS
Digital Disruption and the South African
Commercial Real-Estate Market
BY NADIR JEEVA
The commercial real-estate market and industrial property sector in South Africa have not kept up with the changing currents of technological discourse .
Both the commercial and industrial property segments of the real-estate market have managed to escape the tides and tsunamis of technological disruption and innovation . The industry – globally and in South Africa - has been in a pretty safe , comfortable and convenient space . Not a lot has changed despite the infinite opportunities afforded to us by information communication technologies . The ability to generate , process and efficiently apply knowledge-based information is a key feature critical to the digital economy . It is also a networked economy , which offers many ways in which collaboration can be pursued . Sadly , the commercial real-estate and industrial property markets lag behind in innovation and are slow to adopt new technological innovations in relation to the residential real estate market and other industry sectors .
Digital disruption is change as a result of the influence of digital technology . It has an effect on how we do business , engage and interact , and think . This quick-fire quacking process , which often seems extremely uncomfortable at first , is necessary to maintain the rhythm of profitability and wealth creation , to increase productivity levels and ensure that a climate exists for competition and innovation to drive market leadership .
Disruption shatters business models and then reconstitutes them entirely . It threatens existing business models , and may render them obsolete . But , most importantly , it introduces innovation into the
mix and offers alternatives to the status quo . It is therefore both a threat and an opportunity .
We can look forward to three disruptions in commercial real-estate and industrial property segments over the next few months .
Disruption shatters business models and then reconstitutes them entirely . It threatens existing business models , and may render them obsolete .
OPENING UP NEW INVESTMENT OPPORTUNITIES THROUGH CROWDFUNDING Real estate crowdfunding websites are springing up everywhere , including South Africa . These sites offer small investors the opportunity to pool their money to buy investment properties , or invest in new commercial and industry property developments .
Despite being one of the most profitable investment opportunities in the market , commercial real estate was traditionally only available to the wealthy elite . Through crowdfunding platforms , smaller investors are now able to participate in property investments .
Of course , South Africa already has a burgeoning stokvel culture . Combined with technology , it really offers an exciting new way for real-estate to open up wealth creation opportunities . Interestingly , in the US real-estate crowdfunding is the fastest growing segment within the crowdfunding industry , according to San Diego-based DiversityFund .
44 AUGUST 2016 SA Real Estate Investor www . reimag . co . za