We are delighted to share the third 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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Sustainability in our built world
Real estate contributes 39% to global greenhouse gas emissions, making it the single largest emitter of any industry. This untenable status has meant that climate action is increasingly a priority for the sector, with interested stakeholders including tenants, investors, debt funders and regulators alike. An unprecedented response is required to match the scale of the crisis if the sector is to achieve the goal of a sustainable built environment. Indeed, this needs to be a transformational decade in the shift towards net zero buildings.
Global metropolitans are at the forefront of addressing this challenge through the enactment of new regulations. In South Africa, the four largest municipalities (Johannesburg, Tshwane, eThekwini and Cape Town) have signed up to the global C40 Initiative – a network of 100+ world leading cities collaborating to deliver the urgent action needed to confront the climate crisis.
C40’s mission is to halve the emissions of its member cities within a decade. The four South African cities have all pledged to enact regulations and/or planning policy to ensure new buildings operate at net zero carbon by 2030, and all buildings by 2050.
Existing technologies, including the sourcing of energy from green providers, can only reduce current real estate sector CO2 emissions by 46%, according to research led by the World Green Building Council. Clearly, significant further innovation and investment is needed to deliver on global net zero targets.
Based on the most recent public company reporting, renewable energy is the key environmental focus of the South African market, given the more demonstrable return profile and additional benefits of energy supply certainty. We see this trend continuing whilst renewable energy remains a relatively small (<10%) component of most portfolio energy consumption.
In this regard, it was interesting to see Attacq announce a Power Purchasing Agreement (PPA) for the direct acquisition of renewable power to supplement their embedded generation (effectively tripling their renewable energy capacity) as well as Fortress REIT announcing the trialling of a battery installation at Bloemfontein Value Mart. Perhaps in the future, South Africa may welcome more sustainable options for power storage such as gravity energy storage solutions like Energy Vault.
As a result of the ongoing instability of power supply, it is no surprise to see exciting new solar rental and rent-to-own businesses emerging, including GoSolr and Versofy, targeting the residential homeowner.
There are also interesting developments in sustainable technologies within the building material and construction processes, with some early-stage technology breakthroughs including:
- Neustark – a Swiss based company using recycled concrete as a carbon dioxide reservoir permanently storing the same amount of CO₂ that is generated during its production; and
- Icon – an US company specialising in 3D printing robotics, software, and advanced materials for the construction of 3D printed buildings. The company has constructed and sold the world’s first 3D printed home and is in discussions with the South African Department of Science and Innovation, in partnership with the KwaZulu-Natal Department of Human Settlements, for the piloting of 25 housing units with the aim of establishing sustainable human settlements across the country.
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SAPOA Proptech survey
SAPOA has recently launch a proptech committee with the backing of other industry associations, including SA REIT Association and Green Building Council South Africa (GBCSA). The objective of this industry leading committee is to drive a collaborative sector approach to technology and innovation initiatives for the built environment to: 1) increase industry profitability; 2) improve industry customer experiences; and 3) reduce risk.
REdimension Capital is proud to be represented on this committee which will educate, inform and support the sector as the pace of digital transformation and technological innovation accelerates.
The committee has issued a short survey – available here – and would welcome your feedback and insights. The responses will help inform a tailored approach for the committee allowing it to optimally service the industry’s needs.
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Africa Proptech Forum Start-up Competition
We are pleased to have partnered with the Africa Proptech Forum in support of their start-up competition. If you are an early-stage proptech operating in Africa, visit www.africaprotechforum.com to get more information on this exciting opportunity. In addition to the monetary awards, the competition affords a great opportunity to showcase your business to industry leaders, VCs and potential new clients.
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Landmark transactional activity locally and abroad
- DigsConnect has raised money from the Delta – Africa’s largest venture builder. DigsConnect is the largest student accommodation housing platform in Africa.
- Gmaven is looking to raise $500k to continue to build out its commercial real estate software and data services.
- Pupil has raised $45m and recently signed a strategic agreement with Cushman and Wakefield. Pupil is a spatial data company that has created an ecosystem to digitally map the built world.
- Parcl raised $4.1m to digitise real estate investments, by creating a way for everyone to invest in real estate via a digital square foot of real-live property through its price index.
- Flow carbon raised $70m to further build out its carbon credit trading platform enabled by blockchain. The platform issues tokens which are linked to offsets to help create an easier and verified process for companies to offset.
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What we are reading
Real Estate Tokenization Promises to Democratize CRE Investing | GlobeSt
SA’s proptech revolution is about to begin
Partnership: The Critical Ingredient for PropTech Adoption
Using proptech to combat climate change
The Rise of Proptech in Commercial Real Estate
Let’s Get Digital: The Big Trends Speeding Real Estate Digitisation
How do FTSE 100 REITs approach tech and sustainability?
Meta predicts the metaverse could add $40 billion to Africa’s economy