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