SA’s property sector bets on proptech to climate financial headwinds


e4 Group CEO, Grant Phillips

There’s little doubt that the South African property sector, like most industries, is at the moment dealing with some challenges. One main financial institution noticed credit score impairments rise 57% within the first half of 2023 – a results of the influence of upper rates of interest, greater ranges of inflation and report ranges of load shedding. One other financial institution stated its complete internet credit score impairment prices on gross loans and advances grew by 80% to R6.4 billion over the monetary yr ending February 2023.

However Group CEO of fintech firm e4, Grant Phillips, says it shouldn’t be a long-term concern. “The market is at the moment depressed as a consequence of greater rates of interest and the elevated price of dwelling, however the property sector is cyclical, as we’ve discovered in over 20 years in enterprise as a proptech knowledgeable. We count on the market to be a bit slower for round 18 months earlier than it turns once more. Sure, patrons, lenders, and all position gamers are feeling the strain, however now’s the best time to benefit from the downturn to optimise processes and prepare for the following upturn.”

Getting on board with proptech, any expertise that helps people or corporations purchase, promote, and handle property, is a method of doing precisely that. Some native specialists imagine that embracing proptech could possibly be the sector’s saving grace, and worldwide urge for food can also be rising exponentially. The 2022 Proptech Annual Barometer reveals that funding within the proptech sector is “remarkably excessive”. And it’s simple to see why – the 2020 iteration of the Barometer discovered that 80% of corporations utilising proptech noticed a optimistic influence on operations and providers, with 70% benefitting from a rise in decision-making and funds.

This has definitely been the expertise for e4 and its companions. Initially created over 20 years in the past to hyperlink lenders with attorneys and conveyancers within the house shopping for course of, e4’s focus stays on proptech, although it has since added a myriad options and merchandise to its portfolio. Phillips explains: “We offer a digital ecosystem for the house shopping for course of the place all stakeholders can talk digitally to facilitate the transaction, from the lender and purchaser to the conveyancer, charges council, and deeds workplace. In a nutshell, our position is to lower the period of time it takes from the provide to buy till the customer strikes in. We shorten that lead time by automating and optimising processes to take away any friction, similar to utilizing superior analytics to confirm knowledge – historically a time-consuming, labour-intensive handbook course of. We spend lots of time in shoppers’ environments to grasp their frustrations and customise our providing to their wants.”

By repurposing its early-stage expertise, e4 has additionally developed options that tackle the wants of assorted sectors. In consequence, e4 has develop into a central determine in quite a few transactional ecosystems. It’s additionally expanded internationally, partnering with the second greatest lender within the UK to construct an identical digital ecosystem for the house shopping for course of.

Most lately, the corporate introduced its acquisition by a consortium of buyers led by unbiased personal fairness fund supervisor Infinite Companions. The transaction is valued in extra of R1 billion.

Phillips says their acquisition, income diversification and geographic enlargement are clear indicators that proptech is on an upward curve, regardless of quite a few challenges within the property trade. Now could be the time to get on board, he says. “Those that embrace proptech as a core a part of their enterprise mannequin will be capable to obtain larger effectivity, profitability, and buyer satisfaction. Use this slower time properly to arrange and provides your self a aggressive benefit when the market turns once more.”



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