OpenUCT :: Browsing by Author "Viruly, Francois"

Browsing by Author "Viruly, Francois"

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Open Access
A Case Study to Determine if Micro-Unit Developments Create Another Step Along the Housing Ladder for Low-Income Homeowners in Soweto
(2022) van Eeden, Marile; Viruly, Francois
The South African government has been providing subsidised housing for decades, yet a large portion of the population live in inadequate housing. More recently, it has been found that many residents earn more than what is allowed to qualify for a housing subsidy; however, they earn too little to enter the formal market. These residents, therefore, turn to the informal market, where they obtain housing in informal settlements or housing in backyards. A new housing development trend is emerging in the form of backyard micro-unit developments. This research proposal examines the potential of backyard micro-unit development to address the low-income housing demand and how these developments can be used as a means to climb the housing ladder. An exploratory case study is undertaken to understand housing trends within Soweto, South Africa. A mixed research approach was used together with both quantitative and qualitative data. The COVID-19 pandemic, however, posed a significant limitation on fieldwork; therefore, the study relied on secondary data sources. The analysis indicates that the backyard micro-unit developments mimic the formal market, and the backyard micro-unit developments provide an adequate housing option for low-income earners. Furthermore, the demand for affordable accommodation results in the commercialisation of the informal rental market and presents the opportunity for homeowners to move up the housing ladder, and it addresses the mounting housing backlog in Soweto. Furthermore, the analysis indicates the significance of a title deed for residents in townships and its role in their ability to climb the housing ladder.
Open Access
A study on commercial property pricing in Uganda
(2022) Mirembe, Rachael Daisy; Viruly, Francois; Michell, Kathleen
Property developers and investors seek to understand the drivers of prices for office and retail space. Through literature, we learn that size and age, locational attributes, physical features of the properties, and economic variables are significant determinants of commercial property prices. However, previous work has narrowly focused on aspects akin to formal structures and ignored the role of institutions, especially conventions and social norms incredibly, and what influences the behaviour of the property developers and investors while making the pricing decision. Therefore, the goal of this study was to understand how prices for commercial properties are determined in Uganda. The objectives of the study were to understand the role of conventions and social norms found in the property market environment on price determination and to explore the behaviour tendencies/heuristics exhibited by the players during the pricing decision-making process. The study was qualitative in nature. The researcher interviewed property owners, developers, institutional investors, and key informants to understand the conventions and social norms that exist in the property market and how they ultimately influence the pricing decision of commercial buildings. This study reveals that conventions exist in the Ugandan property markets. The conventions signal a price to the players in the property environment. However, due to information asymmetry and irrationality, each player interprets the price signals differently, using heuristics to develop the final price. This study helps researchers understand the role of individual behaviour/heuristics in advancing our understanding of institutions and the effects of the two on commercial property pricing, the economy at large and its consequences on economic policy.
Open Access
An analysis of diversification by location in the South African property market
(2016) Shisana, Fumani; Viruly, Francois
The purpose of this dissertation is to investigate whether a property investor could diversify their portfolio by investing in the same property class and type throughout three different cities in South Africa. Furthermore, the study aimed to achieve this by providing an in-depth analysis of property cycle activity in South Africa and investigating how different South African cities react to the national property cycle. Cape Town, Durban and Johannesburg were chosen, as they are major cities in South Africa. The time frame used is the 2001 to 2009 property cycle with specific reference to office space. The timeframe does not cover the property cycle over an extended period where factors may be different from the ones concerned here. The outcome of the study will help to provide an understanding how the three different cities reacted to the national property cycle using variables such as but limited to gross rentals receivable, total return, income return and vacancies. The results of the study will help in making investment decisions, especially for investors who may want to diversify their portfolios across different cities within the same country. The methodology of this dissertation will be based on a comparative analysis using mainly Investment Property Databank (2013) data subsequent to a literature review. The findings are based on Investment Property Databank (2013) statistical industry performance data. The conclusion will be drawn from the results. The primary motivation for this research stems from investors' need for a greater understanding of diversification within the property cycle to improve investment decisions. The primary objective achieved was to contribute to the understanding of the predictability of the property cycle, which can assist in the decision making of a property investor looking to diversify by location in their property portfolio. Whilst this finding was not the primary objective, this dissertation revealed that there are synchronicities between the Central Business District and decentralised office markets of the three cities of Cape Town, Durban and Johannesburg.
Open Access
An analysis of the structure and maturity of the Doha property market
(2017) Makanya, Rufaro; Viruly, Francois
This research is primarily focussed on the dynamics that determine the maturity of property markets. It considers the evolving institutional environment in which markets function and highlights the characteristics of property markets in both developed and developing countries in order to analyse the characteristics required to determine their maturity. The primary research targets the city of Doha located in Qatar. This is compared to other property markets around the world, using the available literature and the knowledge of Doha's expatriate property professionals. The purpose of this research is to contribute to the research and knowledge of property markets by assessing the players, institutions and characteristics of the property market in Doha to assess whether it is driven by the same maturity forces as those that drive typical markets elsewhere. The research concludes that property market outcomes could be improved in Doha by improving and developing the property market maturity factors. Considering all the factors. The property market in Doha was identified as fairly immature in comparison to international best practice. It has improved significantly recently and is on a path to compete with the more mature markets in future. Recommendations proposed in the research findings focused particularly around the strengthening of property market institutions to allow for further improvements to market maturity and cautioned against verbatim copying of successful market practices from elsewhere.
Open Access
Behavioural economies in development decision making
(2024) Nel, Paul; Viruly, Francois
This paper will research why businesses fail, the human connection to business failure – especially in the real estate market – and how to plan for success in real estate developments. It is important to understand the heuristics or rule of thumb of what, why and how an individual is driven to make certain decisions, their personality traits, past experiences and biases, how historic data can assist in predicting future market events, the variables thereof, and the use of traditional finance models within these paradigms.
Open Access
Challenges faced by small real estate entrepreneurs in the Johannesburg Central Business District
(2018) Kgaka, Lesedi; Viruly, Francois
The challenges which entrepreneurs in general face have been well documented over the years, however, challenges specific to real estate entrepreneurs have not adequately been identified. In a developing country like South Africa, the impact of entrepreneurs in the growth of the economy and in its transformation objective, cannot be underestimated. The challenges in the real estate sector in which developers provide affordable housing, are of crucial importance to identify as doing so will promote further development which will aid in reducing the high unemployment and poverty rate. These challenges have not yet been adequately identified. The aim of this research paper is to identify them, to rank them in order of importance and to provide in depth analysis as to how they affect real estate entrepreneurs in completing their developments. The focus will be on small medium and micro-enterprise (SMME) developers as entrepreneurs in an urban context, namely in the Johannesburg central business district. The impact of these developments is higher; thus, the challenges experienced by these developers are of significance. Literature on entrepreneurship was reviewed to ascertain the definition of an entrepreneur, their mindsets and what drives them. This was used to define a real estate entrepreneur which in the context of this research paper is someone who purchases land or buildings to develop them into residential housing for the purpose of a return (both social and economic). In the research methodology a phenomenographic approach was used, appropriate for a qualitative research approach, as it sought to identify challenges through the developers’ experiences. The developers selected, all had prior experience in the field. The researcher interviewed them in person. Their responses were recorded, transcribed and evaluated. Seven challenges in order of importance were identified namely: 1) Apartheid 2) Education, Experience, Competencies and Mentorship 3) Land 4) Municipalities 5) Equity 6) Time Delays 7) Professional Team The legacy of apartheid has a negative effect on the real estate development industry as it is largely and experience-based profession of which many previously disadvantaged people were previously denied access to. The result of this is that many highly educated, first time developers enter the market with the support of funders but the lack of experience in development thus making many costly mistakes which could have been avoided had they had the right mentors and experience within the field. This has proven to be difficult to receive as those with the skills and experience are often reluctant to pass it on to those whom they may be unfamiliar with. It was found that SMME entrepreneurs lack the basic competencies to complete developments due to their lack of experience, which they in turn rely heavily on a professional team which is either too costly for the feasibility of the development or has limited experience, due to similar reasons pertaining to apartheid. The concern of gaining access to the best prime land at reasonable prices was great as it was found that this land, mostly government owned, was often sold to established private developers who had access to quick funding due to their track record and experience. This left the less desirable land to SMME developers who would in turn reap lower returns. Challenges related to the inefficient municipalities in the approval of development plans, the lack of access to affordable finance and equity, and the time delays from the approval of financing and building plans to those due to the contractors and professional teams, were identified as the three largest challenges. This is because they have cascading adverse effects on the rising cost of the developments, possibly rendering them unprofitable on completion, if they eventually reach this point. Solutions proposed include intervention by the government, private institutions and experienced mentors to guide first time developers in gaining the required skills to become successful and to pass on to other developers. Such interventions include incubation programs for entrepreneurs with a mentoring aspect from industry veterans who wish to share their networks and experience in paying it forward. Once these entrepreneurs have completed successful developments they would be mandated to become a mentor to other entrepreneurs as a way to continue closing the experiential gap for SMME real estate entrepreneurs.
Open Access
Economic variables and their relationship to the returns of listed and unlisted commercial properties in South Africa
(2015) Lin, Che Wei Joey; Viruly, Francois
The purpose of this research is to investigate the relationship between unlisted and listed commercial property returns and the macroeconomic factors identified, which are the stock market, economic activity, inflation and interest rates, in South Africa for the period from 1995 to 2013 (for unlisted properties) and from 2002 to 2013 (for listed properties). It is commonly understood that relevant macroeconomic variables impact asset prices; it is therefore easy to see why it is important to examine the dynamic interactions between the macroeconomic variables and property returns. Previous studies identified stock market performance, economic growth, interest rate and inflation as significant macroeconomic variables. The empirical research in this work is conducted using regression and vector auto regression (VAR) methodologies consistent with prior studies. Regression analysis considers the statistical dependence of the dependent variable on one or more explanatory variables. VAR analysis permits inferences to be drawn about how a particular variable helps to explain property returns and to see how a shock from the same variable affects that return. The work concluded that unlisted property has insufficient historical data to perform the relevant statistical testing. It also established that unlisted property has shown a high correlation (69%) to listed property. Finally, for listed property it was determined that interest rates were found to be a significant negative variable. This result was consistent with the impulse response analysis conducted. Variance decomposition also showed that the interest rate variable explained almost 49% of the volatility of listed property. No other economic variables identified in this work were found to be statistically significant. This research is the first of its kind relating to commercial property in South Africa. The findings of this research reaffirm the theoretical argument that the relationship between interest rates and returns of commercial property is negative. The findings of this research are of significance to investors, analysts and policymakers wishing to acquire a better understanding of this market.
Open Access
Identifying the main indicators to consider when choosing the most profitable property for short-term rental
(2022) Visser, Daniel; Viruly, Francois
Short-term rental in the sharing economy has brought about a relatively inexpensive way to complement a normal household's income. In 2008 Airbnb introduced a web-based platform where anybody could advertise their “spare bedroom” for peer-to-peer lodging, and where potential guests could book and pay for this authentic stay away from home. Over the following years other web-based platforms i.e. Vrbo, Bookings.com, TripAdvisor, Google to name a few, have followed the now multi-billion-dollar Airbnb phenomenon. Income from short-term renting has the potential to outperform traditional residential longterm rent by far under certain conditions. This research investigated those factors to determine the “best buy” in this potentially lucrative market. Feng (2010) mentioned that in order to analyse a property's liquidity in the short-term rent market one should first know how much rentable traffic to expect. He further mentioned that high tourism levels and heavy buyer competition offer more liquidity, whereas limited tourism and weak competition can render a property illiquid. This means the location of the property plays the most critical role in this market. The process of finding the “best buy” in terms of short-stay rental property starts by determining the target market's needs – for example, tourists looking for cost savings, household amenities, and the potential of a more authentic local experience (Guttentag, 2015). This will determine the ideal property location. Next, property hosts need to look at the available funds to spend on the investment property in order to earn the return they are looking for. This amount will become the main filter when searching for properties in the identified locations. Finding a short-term rental property at the right price means understanding the cost of living and, importantly, the potential rentable income in the area. This involves taking into account existing rental rates, property taxes, and other indicators providing information on the cost of living in the markets being targeting. The nightly fee (price per unit per night – Rpun) becomes the next important indicator. Making sense of all the factors and role-players involved in identifying the “best buy” is difficult without a model, and therefore a decision-making model was developed. The research findings showed that the main indicators used to establish the “best buy” were the estimated value, annual net operating income, and the buyer/viewers' preference. The viewers' preference (VP) played a key role as an indicator because the property will become the owner's home while the investment value (IV) rating, derived from dividing the net operating income by the estimated value, indicates the economic prosperity of the property used in the short-term renting sector. This model was therefore called the IVVP model in this dissertation.
Open Access
An investigation into how value is created through water sensitive urban design
(2017) Mallett, Gregory David; Viruly, Francois; Michell, Kathy
A key challenge facing developing countries is the rapid increases in urbanisation and the effect this has on their water systems. Water sensitive urban design (WSUD) is a process that considers the entire water system with the aim of achieving a water sensitive city (WSC). However, little is known about how value can be created through WSUD in terms of the sustainability of urban precincts in South Africa. The researcher therefore considered the well-established literature highlighting the relationship between WSUD and sustainable urban development. To understand the value derived from these concepts, two case studies were assessed, namely the Victoria & Alfred Waterfront (V&A Waterfront) and Century City. However, it should be highlighted that due to the uniqueness of these cases, no generalisations from the findings can be generated. The methodology implemented for the case studies was social constructivist in nature and to satisfy the research objectives, semi-structured interviews were conducted, documentary material was gathered, and photographic evidence was collected. Moreover, a diverse collection of data was assessed, which was extracted through various methods of data collection, thereby resulting in an in-depth understanding of the case studies. This research concludes there is a relationship between WSUD, sustainable urban development and value. It further argues that the underlying principles of facilities management (FM) and more specifically urban FM provide a managerial framework that can connect these concepts to achieve sustainability for urban precincts. Furthermore, the study uncovered the need for value capture mechanisms as a form of infrastructure financing and value creation for urban precincts. However, it was established that neither case study make use of such mechanisms, so future research is required in this regard.
Open Access
Investing in REITs: A value-based approach
(2019) Brits, De Villiers; Viruly, Francois
The primary purpose of this study is to test whether a value-based investment strategy will outperform a growth-based investment strategy when applied to SAREIT investment. The secondary purpose is to assess whether the SAREIT investor can discriminate between strong and weak value-REITs through sound accounting-based fundamental analysis using the F-Score Model. Building on existing research on value-based investment strategies and market efficiency, this study offers an SAREIT perspective to the existing body of knowledge on value investing theory through portfolio selection based on P/NAV, P/E, P/CF and DY ratio analysis. The holding period returns of the respective value-based portfolios are compared to their growth-based counterparts for an examination of relative performance. The evidence from this research does not offer probabilistic support that a value-based approach to SAREIT selection and investment will outperform a growth-based approach, nor that it is possible to discriminate between financially strong and weak value-REITs through sound accounting-based fundamental analysis using the F-Score Model. Further research is required to develop the said strategies and models for application to the SAREIT sector.
Open Access
Leveraging public land ownership in the urban land market for commercial property development to achieve socio-economic outcomes in South Africa
(2018) Nhiwatiwa, Shelton; Viruly, Francois
This thesis investigated how the South African local governments in the Western Cape Province are involved in the urban land market and, specifically, land supply for commercial property development to optimise socio-economic objectives in the South African property sector. The current conditions, challenges, and opportunities were examined using a qualitative research approach, combining primary and secondary data collection methods. The data for this research was gathered from a literature review, interviews and an online survey with local government property management officials directly involved in land transactions in local governments in the Western Cape Province, South Africa. The research found that, if well-managed, public land offers opportunities to achieve government's socio-economic objectives of driving economic growth, creating employment opportunities, and advancing people economically and socially. Through their majority urban land ownership (Gelderbloem, 2012), the South African local governments in the Western Cape Province can leverage their land assets for commercial property development to achieve socioeconomic outcomes in the urban land market. Local governments can achieve this by leading, shaping and unlocking development potential through direct supply of land, land use allocation, and facilitating, expediting and incentivising development to stimulate desired catalytic property developments. Catalytic projects refer projects that stimulate development and redevelopment of surrounding properties. The land allocation and property decisions in local governments are mainly driven by socio-economic objectives where sustainable development is the top priority and financial gain, though important is not key. In order to give full effect to leading, shaping and unlocking development on public land, local governments should make conscious, calculated interventions in the land supply chain for commercial property development to ensure a healthy property market. Also, it was found that, ideally, local governments should dispose of their land with rights in place in order to realise full valuation potential on their property as well as to minimise risk to the potential developer. Lastly, it was found that land supply from local governments for commercial development is faced with a number of challenges, chief among them being: excessive legislation and compliance requirements, lack of expertise, political interference, inadequate land management systems and others. In order to optimise local government land ownership to achieve socio-economic objectives in the urban land market, it is recommended that municipalities make well thought out strategic interventions in the land market as well as invest in the establishment of land management information systems to establish comprehensive asset registers to render effective planning and programming of their land holdings. Notwithstanding the challenges faced by local governments in alienating land, local governments in South Africa can leverage their land ownership in the urban land market for commercial property development to achieve socio-economic outcomes.
Open Access
Making property investment decisions in a market environment with poor transparency
(2023) Kadzuwa, Godfrey; Viruly, Francois
Access to reliable property market information for property valuation, property development appraisal, investment analysis and property investment decision-making remains a challenge in many emerging countries. Property investors in emerging markets face a significant gap in access and availability of reliable property market information but still make optimal investment decisions. The study examines how investors make property investment decisions in emerging property markets with poor market transparency. Despite most African being characterised as emerging markets, limited research has been conducted to establish how property investment decisions are made in such markets. Therefore, this research's primary objective is to answer the question, “how do investors make a property investment decision in an emerging property market like Malawi characterised by poor transparency?” An in-depth study of relevant literature and a qualitative research approach, through semi-structured interviews, was undertaken with property investors in Malawi (the unit of analysis) was followed to answer the research question. The outcome of the semi-structured interviews was coded from which critical themes were developed. This study found that investors in Malawi use a similar decision-making structure / mechanism as those in more transparent property markets; however, the depth of information is different.
Open Access
Property management in the public sector has specific characteristics which differentiates it from the private sector: evidence from an analysis of the South African market
(2013) Mukori, Samuel; Viruly, Francois
This thesis investigates the perception of public sector property management professionals on the differences between public and private sector management in South Africa. The main objective of the research is to ascertain if private sector property performance measures are appropriate and sufficient in scope to be used in the public sector. A two-fold quantitative-descriptive survey method was used together with an analysis of the public property management literature. The research established that property management between the two sectors is different mainly due to their different objectives of property ownership, the private sector being profit driven while the public sector is social service delivery oriented. Property composition is also different as the public sector property portfolios are diverse as they include assets that have both financial and non-financial objectives. The study concludes that private sector property performance measures are appropriate for use in the public sector as they address financial issues. However, these measures are insufficient as they tend to ignore non-financial variables that contribute to service delivery which is one of the main reasons for the public sector's existence. Therefore an appropriate and sufficient public sector property performance regime should include both financial and non-financial variables, which can be presented by a service balanced scorecard (SBS) which measures public property's contribution to service delivery.
Open Access
The relationship between foreign direct investment and the maturity of the real estate market: an assessment of investment activities of South African real estate companies with exposure on the African continent
(2017) Mahlaole, Tahane; Viruly, Francois
Africa has begun to show tremendous socio-economic development and gradually improving market conditions. As a result, Africa's perceived attractiveness has improved as new investment frontiers are sought. It has become crucial that current and future economic and market growth needs can be met by infrastructure and real estate development. In order for the various real estate markets to develop further, they would need to attract a significant amount of capital expenditure, of which a portion may come from institutional investors. In order to achieve this, Africa needs to ensure that the desired investment environment is stimulated in the real estate market so as to redirect some of the capital flows into improving and increasing current and future real estate stock on the continent. This dissertation focuses on real estate in Africa by assessing the nature of the relationship between the maturity of real estate markets and foreign direct investments. It does so by assessing the investment decisions of South African real estate investors with exposure in the rest of the continent. The research findings seek to provide insight into the nature of the relationship and further assess its level of importance for South African real estate investors. Key findings were that maturity of real estate markets correlated poorly with investment activities and investors priorities when making investment decisions. However, maturity is a factor in real estate investment decisions. The aim was to assess the minimum level of maturity that was required for South African investors before entering a market; however, it became clear that mature markets or very immature markets are not necessarily what investors seek. An element of the risk/return profile is influenced by the maturity of markets: the less mature markets have the greater level of risk and the more mature markets have very little risk in comparison.
Open Access
Rethinking the Cape Town Property Developer: Understanding the local developer's perspective of the City of Cape Town Municipality and comparing this perspective to local Transit-Orientated Development policy constructs of the developer
(2020) Abdullah, Mohammed Perwez; Viruly, Francois
Purpose – This dissertation investigated the degree to which the City of Cape Town understands a ‘notional' Cape Town property developer within the Transit-Orientated Development (“TOD”) context. This dissertation is not meant to draw a distinction between a right or wrong model of a local property developer, but to investigate what a richer model would look like using alternative economic perspectives that capture the multiplicity of reality and possible TOD policy implications. Design – A literature review was undertaken to understand institutional and behavioural economic frameworks, how each framework relates to the property market, and how to use the frameworks to assist in defining a developer. Further research was conducted to consider the property development process from the perspective of the Complex Adaptive Systems (CAS) framework. The property developer as an actor within the property market was then deconstructed. Alternative approaches to local government involvement in the development industry and the developer's perspective on TOD was also explored. A qualitative, semi-structured localist interview was conducted with nine major developers operating in Cape Town. They were selected because they are likely to participate in catalytic TOD-type projects. The interview aimed to understand their world view and how their lived experience relates to the City of Cape Town municipality. Findings – There is a ‘definition gap' between how the City of Cape Town has defined a developer and the findings of this dissertation. Policy implies a developer has perfect decision-making qualities pursuing maximum profits, whereas this dissertation found that developers tend to be focussed on risk reduction and exhibit satisficing and loss-averse behaviour. There are also those who prefer to build and hold a portfolio of rental properties which are not defined in policy. This type of developer possesses a different outlook and investment behaviour than the one defined in the TOD Strategic Framework. The City of Cape Town does not appreciate its positioning within and its influence on local property market dynamics, as it relates to the ‘rules of the game'. Practical Implications – Without understanding these distinctions, developers may not necessarily, predictably and readily respond to any TOD incentives and levers as set out in the Framework, resulting in policy perpetuating the very spatial inequalities and status quo the City of Cape Town aims to redress.
Open Access
Sustainable construction industry strategies in South Africa: Specialization vs Diversification
(2019) Lorimer, Brett Alan; Viruly, Francois
The construction and Civil Engineering industry is characterized by high risks, but equally high returns. The dynamics and complexities of this industry and its cycles, make it an extremely volatile and difficult industry to operate within. This is evident in the number of construction companies currently struggling to remain solvent, have gone into business rescue, and filed for bankruptcy. This industry has historically struggled to position itself effectively to deal with a down turning macro-economic environment - When it is good, it is very good, but when it is bad, it is very bad. Typically, there have been two differing strategies – Specialisation and Diversification. Specialisation, on the one hand, enables contractors to fine-tune their skill set and gear their businesses accordingly, to enhance their competitive edge. However, the result is concentration risk. Diversification however, enables contractors to become more risk-averse, and thereby less sensitive to the extremes of the cyclical nature that the construction industry is characterised by. The application of portfolio theory to a portfolio of construction projects was investigated, advancing the existing research done by Kangari and Riggs. Whilst most research has been limited to listed construction company performance, this analysis differentiates itself as it focusses on the intrinsic performance of actual construction projects (assets), which together form a portfolio. The theory is motivated by the concept that in order to value the stock, one must value the business. Construction companies should pay more careful attention to the selection of their projects. Critically, they should avoid becoming heavily invested in one type of construction, but rather to find a balance that will provide diversified risk benefits. Becoming more diversified can be achieved by investing in different types of construction projects - reducing specific risk. However, the most diversified position can only be achieved when investing outside the field of construction completely, and thereby reducing not only specific risks, but systematic risks too. This enhances sustainability in a way that the construction industry has not yet experienced.
Open Access
Sustainable urban development - the need for a South African rating tool for sustainable precinct developments
(2017) Potgieter, Melissa; Viruly, Francois; Michell, Kathy
Globally, urban sustainability is shifting its focus from individual building to sustainability at precinct, neighbourhood and community levels. This dissertation aims to determine whether the South African urban development industry has a need for the introduction and incorporation of a precinct level urban sustainability rating tool. This dissertation employs a literature review and single case study approach to define precinct level urban sustainability, to explore existing sustainability initiatives and to investigate the expected impacts of a South African precinct level urban sustainability rating tool. The research finds that while there ha been interest in precinct level sustainability from the private sector and some leading municipalities, precinct level sustainability runs the risks of becoming nothing more than a political catch-phrase and of becoming stuck in an ongoing cycle of planning, especially from a national regulatory point of view. It is expected that the introduction of a South African precinct level sustainability rating tool will mitigate this situation by providing motivation for the adoption of, and a clear guideline for the physical implementation of, wider sustainability principles and objectives.
Open Access
The behaviour of real estate actors and cyclicality in the Real Estate Market
(2018) Cronje, Pierre; Viruly, Francois
The proposed research aims to gain a better understanding of the information inefficiencies in the real estate investment milieu through the exploration of the behaviour of real estate actors. The supposition is that a better understanding of the real estate actor behaviour in the context of market cyclicality should add to the body of knowledge on the pro-active mitigation of real estate investment losses. The exogenous factors causing market cyclicality such as the sub-prime mortgage crises of 2007/2008 is used analogously to an independent variable with the focus on the behaviour and interrelation of real estate actors or endogenous causes of market cyclicality. A phenomenological approach in the context of constructivist ontology is followed in a connected mixed method research strategy, i.e. a quantitative to qualitative sequential explanatory design to explore the behaviour of the real estate user, - developer and - investor. The quantitative data analysis takes the form of descriptive statistics of office vacancy rates, - areas and - capitalisation rates of seven nodes in Cape Town. Although inferential statistical methods, such as the nonparametric Kruskal-Wallis Test, linear tend analysis and measures of linearity are used it is still used in the form of descriptive statistics to understand phenomena and extrapolate results to other situations. Qualitative data are collected through semi-structured interviews and analysis is done with Giorgi’s descriptive phenomenology approach to synthesise a general psychological structure based on the constituent of the participant’s experience. The study found that regular periods of over- and underbuilding in the real estate market may be influenced by the real estate actor because of the bounded nature of information and bounded capability of the actor. Real estate actors display behaviour actively avoiding the negative impact of market cyclicality through the use of agency. An agency based model is developed through this study showing that the real estate actor use specialisation to confine the unknown nature of information and to liberate the bounded ability of the real estate actor through working the network, engaging the network and signalling.
Open Access
Value creation & capture around transport infrastructure station nodes in South Africa
(2016) Lombard, Samuel Hendrik; Behrens, Roger; Viruly, Francois
In the South African context, the infrastructure backlog is ever increasing and with limited government funding, the reality is that the gap will most likely never be closed. There are however, numerous value capturing mechanisms applied elsewhere in the world that can help with infrastructure funding, but little or none have been applied in a South African context yet. This report reviews the literature on value capturing, and explores whether or not it can be applied in transport infrastructure additions in South Africa. This report seeks to understand the applicability of the different mechanisms to a case study of the Gautrain project in Gauteng. Secondary data is used to evaluate the effect of the newly constructed stations on adjacent residential property values. This is done by looking at three variables, namely distance to station, analysis year and housing type. The data used in the analysis is validated by means of an ANOVA analysis, which is assessed by the F-test and a consequent Tukey's HSD test. This paper illustrates that value capturing is possible in a South African context. Stations such as Pretoria and Johannesburg indicated a direct correlation between increased property values and infrastructure additions and can therefore act as justification for value creation and consequent value capture. Further studies evaluating other variables should however still be conducted.

Browsing by Author "Viruly, Francois"

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