Construction and property

The renewable energy sector has opened up new workstreams.

The uptick experienced by the building and home improvement sector during Covid-19 came to an end in 2022 as customers were no longer forced to spend time at home.

However, Afrimat’s Construction Index showed in the second half of 2022 that a number of other indicators were trending upwards: plans passed, buildings completed, wholesale trade and building materials. Also, a Financial Mail interview with Raubex CEO Rudolf Fourie in late 2021 produced an upbeat assessment of the construction industry in South Africa.

In response to Giulietta Talevi’s question about “future prospects”, Fourie said that tender activity was “buoyant” and that the company’s order book stretching beyond two years was something they had not seen in three decades.

Raubex is active in infrastructure, roads and earthworks and materials. Like many South African companies, Raubex is now also present in the burgeoning renewable energy market, offering civil works and electrical installations at projects such as the Redstone CSP project and Copperton wind farm (pictured) in the Northern Cape.

For the year ending 28 February 2022, Raubex reported an increase of 30.9% to R11.58-billion and an increase in operating profit to R945.3-million.

Covid-19 provided a sharp shock for many business sectors, but with the move towards working from home accelerated by the pandemic, none is going to have to look harder at its models for sustainability than the office rental sector.

Logistics, often taken for granted in normal times, became an even more important component of the supply chain during the global lockdown and in the months that followed, with the second half of 2021 characterised by blockages and delays. In that context, the news that Fortress REIT had successfully let more than 100 000m² of logistics space in KwaZulu-Natal, was significant. FNB, which publishes a regular property barometer, has done an in-depth analysis of previous crises to help understand what may occur in the post-Covid property market. According to John Loos, a property strategist at FNB Commercial Property Finance, the most vulnerable sector is likely to be Retail Property. Smaller neighbourhood centres, with more essential items and greater convenience, will be less vulnerable. Statistics SA has found that the percentage of South Africans living in flats has risen markedly. Whereas 26 out of 100 approved plans in 2013 were for flats, this figure reached 59 in 2016. Although the total number of people living in flats is still relatively small (5.4%), this figure will rise as urbanisation increases. ■

ONLINE RESOURCES

Afrimat Construction Index: www.afrimat.co.za Construction Industry Development Board: www.cidb.org.za SA Reit Association: www.sareit.co.za South African Property Owners Association: www.sapoa.org.za SECTOR INSIGHT Home improvers are not at home as much as they were under lockdown.