Returning expat Peter Clark ventures into proptech
South African executive returns to Cape Town from UK with an idea to boost real estate returns
Though young professionals continue to leave South Africa in search of greener pastures, it’s not a one-way street. After living in London for eight years, Peter Clark has decided to return home.
The 36-year-old former head of real estate at Ninety One — previously Investec Asset Management — is moving with his family to Cape Town to run a venture capital start-up, which he hopes will transform South Africa’s fledgling proptech industry.
The idea for the investment management firm came to Clark during the pandemic. At the time, he was managing Ninety One’s real estate investment business, valued at about $1bn.
“The pandemic gave me time to think and do research on where to next,’’ he says. “I’ve always wanted to start my own business and knew there was potential in the space where technology and the built environment collide.’’
The University of Cape Town property studies graduate and chartered financial analyst had recently completed a master’s in real estate at the University of Cambridge, which further fuelled his entrepreneurial ambitions.
Clark took a leaf out of the book of Fifth Wall, a large US-based venture capital firm. Fifth Wall raises money from real estate investment trusts (Reits) to invest in companies that provide cutting-edge solutions to make the buildings in which people live, work and play smarter, greener, safer and cheaper to run.
“I believed I could successfully replicate Fifth Wall’s business model in South Africa as no-one was doing anything similar here,’’ says Clark.
In 2021 he teamed up with varsity friend Matt Marshall, who at the time was running the real estate corporate advisory business for Standard Bank, and they launched REdimension Capital.
Though it took the two men nearly two years to convince local real estate companies that proptech was the next big thing, their persistence has paid off. Major players, among them Growthpoint Properties, Burstone Group, Liberty Two Degrees, Rand Merchant Bank and Sphere Holdings, have bought into Clark’s vision.
In August, the investment management firm announced the first close of its inaugural REdimension Real Estate Technology & Sustainability Fund after securing commitments of just more than R200m. Clark hopes to raise another R200m within the next 18 months. The fund is targeting an annual 30% internal rate of return.
The capital will be used to support early-stage proptech companies with inherently scalable business models. Clark says Reits and other investors don’t only get a financial return but also gain access to game-changing technology to improve operational efficiencies in their underlying property portfolios.
“The intention is to fill a dual gap: local proptech start-ups get access to much-needed capital to grow their businesses and we help match the right tech companies and products to the right landlords.’’
Though the industry is still in its infancy in South Africa, he notes that local proptech companies are making impressive strides in creating new products for the built environment. Clark refers to software that controls and tracks energy and water consumption, recognises number plates of vehicles that enter and leave buildings, and streamlines tenant billing processes.
The use of data analytics to better understand consumer behaviour is also coming increasingly to the fore to help mall owners and retailers retain and grow their customer base.
Clark says that until now few local Reits have invested in proptech. “The South African property industry is still in the early stages of engaging with technology in a meaningful way. We are way behind the US and UK.’’
Ultimately, the idea is to accelerate the digitalisation of real estate to help the local industry boost returns and tick ESG boxes.
“Proptech is crucial for the real estate industry as it drives value and efficiency through automation, greater transparency, improved sustainability and an enhanced user experience,” he says. “The adoption of new technology also helps the industry to remain competitive and responsive to changing trends, benefiting property owners, managers and end users alike.”
Clark adds: “If landlords want to future-proof their buildings, they have no choice but to embrace tech-enabled real estate solutions.’’
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