13 - Redimentions Capital

We are delighted to share the second REdimension Capital newsletter with you.

As a business focused on innovative technology to address productivity, efficiency and sustainability within the built environment, our newsletter aims to provide insights into key sector trends, new innovations and transactional activity in the South African and global markets.

Should you have any comments or feedback on any of the content of this newsletter or otherwise, please don’t hesitate to contact the REdimension team on info@REdimensionCapital.com.

Sincerely,

The REdimension Capital Partners

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Real estate markets increasingly engaging with technology

Global real estate continues to leave investors questioning whether the current investment landscape, significantly impacted by the pandemic, carries unpriced risk, or represents an attractive investment opportunity off a low base. Elevated geopolitical tensions and the start of higher inflation and a rising rate cycle globally provides further uncertainty to local economies and financial markets.

A number of South African listed property companies have reported this year, and apart from the ongoing challenging fundamental backdrop, sustainability and technology have become increasingly prominent in reporting, and a topic of conversation between investors and management teams.

The emphasis on innovation and technology complementing the physical asset proposition has been clear, both as a means of differentiation, and also as a means of driving efficiencies and optimization within portfolios. Concepts such as omnichannel retail and dark stores, hybrid workspaces, user experience and engagement platforms, smart sensors, AI, and even blockchain, the metaverse and non-fungible tokens are becoming increasingly mainstream concepts already evident to a greater or lesser extent in African real estate. While these disruptive technologies may present further uncertainty for the sector, for those that engage actively with them, they present a significant opportunity. Requiring an element of specialist knowledge and focus beyond traditional bricks and mortar, it is no surprise to see the appointment of dedicated technology custodians within property businesses.

Corporate technology investment

Consistent with this trend towards technology innovation and adoption, the latest round of integrated reporting shows some notable corporate innovation investments including:

• Fetch Analytics (Vukile) providing big data location insights around human mobility and footfall within the built environment.

• Shôping (Attacq) an app specifically designed to transform the visitor experience at the Mall of Africa, allowing an interactive interface to communicate with visitors, provide navigation assistance and facilitate digital gift vouchers and loyalty stamps. The app also has an integrated virtual currency, “ZAKA”, that can be redeemed at participating stores.

• SOKO digital platform / NIKA voucher system (Hyprop) a flexible digital leasing platform that enables independent brands to connect in a physical space with their customers without the significant financial commitments that are typical of the traditional retail environment. The platform facilitates online leasing, trading, payment settlement and data analysis and is integrated with NIKA, a digital gift card allowing for the purchase, gifting, and redemption of vouchers via an app.

Liberty Two Degrees has also recently announced a new partnership with MallComm, a digital tenant-engagement platform piloted at Eastgate Shopping Centre seeking to streamline everyday asset and property management tasks, connect stakeholders, generate operational insights, and assist in crisis management.

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Further capital allocations to proptech venture funds

•Fifth Wall (US) – the largest proptech-focused venture capital firm closed its first European-focused fund Proptech with €140 million of committed capital. Like prior Fifth Wall funds, the European Fund attracted the largest owners and developers of real estate, including Aldar Properties, Azora Capital, BNP Paribas Real Estate, Conren Tramway, DAMAC Group, Gestilar, Inmobiliaria Colonial, Ivanhoé Cambridge, Knight Frank, MERLIN Properties, MOMENI Group, NEINVER, affiliates of Northwood Investors, Pecunia, PGIM Real Estate, Pontos Group, Redevco, SEGRO, and Tramway Capital.

•Tishman Speyer (US) – the US-based real estate developer has received commitments of $100 million for its first proptech-focused venture fund. Major commitments were received from the National Pension Service of Korea and the Investment Management Corporation of Ontario.

• Pi Labs (UK) – the European-focused proptech VC completed its third fund at $90 million which was oversubscribed by 40%. Investors in the fund include APG, Aldar Properties, Sellar, King’s Cross Central Limited Partnership, Sino Group, Swire Properties, Kiilto, Hopewell Group and Jaeger Gruppe.

• Camber Creek (US) – the proptech-focused venture capital firm closed an oversubscribed fourth fund with $325 million of commitments. Investors in the fund include both institutional investors and leading real estate firms.

• Taronga Ventures (AUS) – the Sydney-based venture fund focused on technology in the built environment announced new investors in its first fund, the RealTech Ventures Fund, which is targeting commitments of up to $200 million. Current investors in the fund include CBRE, CITY Developments Limited, Prudential’s PGIM Real Estate, Ivanhoé Cambridge, Nomura Real Estate and APG.

• Willshire Lane (US) – a US-focused proptech VC has raised $40 million of commitments for its debut proptech fund. Investors in the first close include J.P. Morgan Asset Management, Nile Capital, and Morgan Properties amongst others. The fund is targeting a final close of $125 million.

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Landmark transactional activity locally and abroad

• ParkUpp: Real estate investment company, Docklands Ventures, acquired the South African start-up for an undisclosed amount. ParkUpp is creating a marketplace that connects owners of parking spaces with companies and individuals requiring parking spaces.

• ParkBee: Raised EUR30 million to expand operations into Europe. ParkBee is Europe’s top digital car parking platform that aims to aggregate and match supply and demand of parking spaces.

• Facilio: The AI-based proptech raised USD35 million in its series B funding from the likes of Tiger Global and Brookfield. Facilio offers real time facilities management to commercial real estate owners using IoT and AI to predictively optimise operations and sustainability.

• Wayleadr: Raised $4 million to reinvent parking at the office by developing tools for last mile automation for commuters. The company wants to revamp the way buildings manage traffic coming to and from their properties using machine learning.

• Clikalia: Raised EUR75 million in a series C round led by Fifth Wall and Soft Bank. Clikalia is a fully digital, end-to-end, residential real estate transaction platform based in Spain.

• ICON: Raised a further USD185 million in its series B round to take it to a valuation approaching $2 billion. The company creates homes using 3D printing.

• BVS: The property technology and surveying firm has been acquired by specialist professional services and technology business Davies for an undisclosed sum.

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