Real Estate Investor Magazine South Africa REIM February 2018 | Page 40

OFFICE Shared Workspace Opportunities for investors in the office market ILAN KIRKEL CEO of Capital Connect Group (CCG), and newly-appointed executive to IEASA’s Gauteng Central Branch. W orld markets may have man- aged to stay afloat for eight years now, but, with growing volatility in Europe, China’s capricious economy, and swelling US debt, another global crash could be on the cards. South Africa, despite political nervi- ness and downgrades of its credit ratings latterly, has succeeded in clawing its way from the depths of another technical re- cession. Most business owners, however, are no nearer loosening their belts. Far from it. South Africa’s commercial property sector and landlords of office spaces are likewise seeing a sharp increase of ten- ants needing to downsize on office area and, where possible, sub-let disused or non-essential spaces to reduce monthly overheads and assist with cash flow. Shared economy, collective success The sharing (or collaborative) economy trend is hugely popular across the globe and quickly filtering into South Afri- ca’s commercial property sector. It is a means for businesses to endure the sub- prime knock-on effect of a still friable economy, and for small, medium- and micro-sized enterprises (SMMEs) in 38 particular to mature while overheads rise. Executed and managed correctly the sharing economy works exceedingly well for all business types despite its relative- ly simple structure. So well, in fact, that a 2015 PwC report noted the global sharing economy to be worth $15 billion annually – a figure that is projected to climb sharply, to $335 billion by 2025. Celebrated sharing economy companies Airbnb, Uber, eBay, and Freelancer.com have over the last few years spawned hundreds more booming multi-mil- lion-dollar sharing enterprises. This form of business ‘ecosystem’ – a distribution of amenities, services, re- wards, and costs which are otherwise difficult to manage – is a sure-fire way for the continent’s SMMEs to revitalise markets and for property investors to at- tach to that success. Where there is value Southern Africa’s property sector – largely saturated on the commercial front as urban centre development continues to outpace demand – affords savvy buyers a medley of good buys and investment prospects. Landlords are now able to make use of the more unusual, previously defunct, spaces – creating smaller and unique business milieus that are aesthetically attractive to young businesses and en- trepreneurs, and, importantly, are cost effective and offer incredibly good value. This, of course, provides a good return on investment for landlords or devel- opers. Much like any business model, for this type of business ecosystem to suc- ceed, members and service providers must be aligned and be incentivised to work together, as a unit. As per the shar- ing model developed by CCG, members should be motivated and remunerated by way of cross selling, supporting one another – sound in the knowledge that FEBRUARY 2018 SA Real Estate Investor Magazine they will share in monthly or quarterly revenues via a trust or similar scheme. As well as safeguarding company growth, creating employment, and pro- moting entrepreneurship, another dis- tinct advantage of this holistic system is that small businesses have a captured audience, a target market on hand. The days of door-to-door sales pitches could be numbered, as might the financial and occupancy headaches of South Africa’s commercial property investors. C M Y CAPITAL CONNECT GROUP’S SHARING MODEL: CORPORATE EXCHANGE Capital Connect Group began roll-out of its Corporate Ex- change hubs during Septem- ber 2017. Corporate Exchange provides SMMEs the tangible assets and resources required for growth, and investment op- portunities; particularly in the commercial property sector. The collaborative hubs, spread across northern Gauteng, are planned for the Western Cape and KwaZulu-Natal. All levels of assistance are of- fered to CCG tenant members, entrepreneurs, and staff: from support for start-ups, and an incubator programme; to an accelerator programme (assist- ing with growth strategies or fast tracking business growth); to that of private equity for the more established entrepre- neurs or businesses looking to enter a new phase. CM MY CY CMY K