South African Business 2025

OVERVIEWConstruction and

OVERVIEWConstruction and propertyWarehouses are doing well.Rhenus Group has launched its new R440-million facility in Meadowview, Johannesburg. The 28 000m²warehouse has solar panels and rainwater harvesting and doubles the logistics company’s operationalfootprint in Gauteng.The entrance of Amazon into the South African e-commercemarket in May 2024 will have raised the expectationsof property companies invested in warehouses. Moreconventional shopping patterns accounted for good resultsfor Equites Property Fund, which looks after the wares of TFG, Sparand Shoprite, among other retailers. In the first six months of 2024,Equites spent R900-million on various projects, including at Jet Park,which is well located in relation to OR Tambo International Airport.In 2024 Galetti Corporate Real Estate told Property that it had signedindustrial leases valued at more than R2.8-billion in an 18-monthperiod, citing the growth of e-commerce and the relative stability ofthe industrial commercial real estate class. This meant that space wasbeing used both for manufacturing and storage.Covid-19 provided a sharp shock for many business sectors,but with the move towards working from home accelerated bythe pandemic, none is going to have to look harder at its modelsfor sustainability than the office rental sector.Logistics, often taken for granted in normal times, became aneven more important component of the supply chain during theglobal lockdown and in the months that followed.The Western Cape’s popularity among corporates was provenby the performance of Bidvest’s office unit in that provincewhere a sharp rise in demand was recorded in the six months toDecember 2023.SECTOR INSIGHTOffice space in the WesternCape is scarce.Afrimat’s expansion continuesapace. In 2024 it purchasedLafarge SA and its subsidiaries,giving it access to the cementextendermarket through fly-ashoperations with the purchasedgrinding plant and cement kilnsfurther expanding the company’sreach within the constructionmaterials sector.Post-1994 trendsOne of the greatest differencesbetween the society thatexisted under apartheid SouthAfrica and the post-democraticdispensation is in the expansionof educational opportunities.SOUTH AFRICAN BUSINESS 202574PHOTO: Rhenus Group

Afrimat continues to expand.Several companies came into being to provide this newstudent population with accommodation at tertiary institutions.Stag African, which has built a substantial student housing projectat the University of Fort Hare in the Eastern Cape, is active inthree provinces. South Point has created a 1 195-bed complexin Braamfontein to go with no fewer than 15 other sites inJohannesburg and it is active in five other cities. Respublica offersrooms in six cities and there are several other companies.The boom in building and developing student accommodationhas been supported by the fact that many students are funded bythe National Student Financial Aid Scheme (NSFAS), providing somesecurity for investors in the sector. Controversies related to NSFAShave recently caused some concern, but demand remains strong.TUHF is among the financing companies that provide funding forhousing projects. In TUHF’s case, inner-city property investors are thefocus of the company’s commercial property financing operations.This includes student accommodation and a township backyard rentalfinance product called uMaStandi which has recently been expanded.Another aspect unique to post-apartheid South Africa is theawareness of environmental issues. A third green bond for thereal estate investment trust (REIT) of Redefine Properties wasoversubscribed when it went to market in August 2023. An amountof R1-billion has been allocated across three, five and seven years.Redefine will use the bond financing to work towardsdecarbonisation of its portfolio through the reduction of energyconsumption by making systems more efficient, collaboration withtenants and solar photovoltaic installations.Green buildings are now considered mainstream in theconstruction industry, and star ratings from Green Building CouncilSouth Africa (GBCSA) are expected in commercial, industrial andresidential projects. The bond was listed on the JSE in the SustainabilityONLINE RESOURCESAfrimat Construction Index: www.afrimat.co.zaConstruction Industry Development Board: www.cidb.org.zaSA Reit Association: www.sareit.co.zaSouth African Property Owners Association: www.sapoa.org.zaSegment, a further sign thatevery sector is responding to theclimate crisis.Township landlords areto be integrated into the realestate sector by means of loansfrom provincial governmentthat will allow them toinvest in their properties andcomply with regulations. TheaboMastandi scheme hasseen 40 loans (from 2 000applications) approved so far.The R300-million SA SMMECrisis Partnership Fund waslaunched in the Gautengtownship of Tembisa in 2022.A collaboration betweenthe Provincial Governmentof Gauteng, the IndustrialDevelopment Corporation (IDC)and the SA SME Fund intendsto make financing available upto R1.5-million to SMMEs andto home owners wanting toupgrade their backyard rentalaccommodation.Six intermediaries havebeen identified to find andfund entrepreneurs and rentalproperties that need workingcapital or asset finance. IndluLiving, one of the six companies,is already funding rentalproperty upgrades, with theexpectation that rental incomewill pay off the loan. ■PHOTO: Afrimat 75 SOUTH AFRICAN BUSINESS 2025