A portion of the fund will go towards accelerating the growth of real estate technology businesses.
- Investment management firm REdimension Capital just announced the launch of a property technology fund that aims to foster the development and use of advanced technology in real estate.
- The fund has managed to raise R200 million from investors such as Investec Property Fund, Growthpoint Properties and Rand Merchant Bank.
- Real estate technology start-ups that want to benefit from the fund must demonstrate that big companies can take up their products.
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Investment management company REdimension Capital recently launched a venture capital fund worth R200 million to foster the use of new technology within the local property industry.
The property technology investment fund, known as the REdimension Real Estate Technology and Sustainability Fund I, aims to invest capital in early-stage innovative technology companies that deliver demonstrable improvements in how property is developed, managed and engaged with.
According to REdimension Capital managing partner Peter Clark, the initiative will bring the local real estate industry up to speed with technology advancements that could accelerate its growth.
“It’s basically set up to invest in new technology in the property or real estate world, and it was set up because our view was that the large incumbent real estate owners, big developers and big managers haven’t embraced technology significantly as a positive enabler for their business.”
“Real estate is the largest asset class globally; it [accounts for] 40% of global assets and is also the largest global carbon emitter, but it disproportionately has a small amount of spend on technology,” Clark said.
Funds raised
So far, the fund has managed to secure funds from investors including the Investec Property Fund, Growthpoint Properties and Rand Merchant Bank (RMB).
“As a key role player in the real estate ecosystem, it’s important for us to play a meaningful role in the development and improvement of the sector,” said RMB co-head of real estate investment banking Riyaad Khan.
“Proptech [property technology] has the ability to vastly improve the way our clients operate and manage properties, ultimately enhancing the landscape for real estate investment in South Africa. This is why we are excited by this opportunity and proud to have partnered with the REdimension team.”
The fund received further support from Liberty Two Degrees, Liberty Group and Sphere Holdings, and is expected to get additional strategic commitments before a final close sometime in January 2025.
“The benefit for our investors, as stakeholders in the real estate world, is that they get a seat at the table on the new technology and what is being developed, and the ability to influence the technology that is being developed, to the benefit of their portfolio,” Clark said in an interview with News24.
Targeted companies
The fund will specifically target companies that develop high-impact solutions that operate at the convergence of real estate and technology.
Clark said:
If there’s an early-stage target real estate technology company that needs capital to grow – but, more than capital, they need to be able to distribute their product to all the big property companies – that’s 100% who we are speaking to.
“It’s not just technology for technology’s sake. Everything that we look at has to have a very clear value proposition; it’s how technology can be an enabler for a range of positive outcomes.
“We are engaging with a lot of those companies. We’ve got a database of 150-plus of them in South Africa, but more are coming to us … and we look to invest in those companies to give them growth capital to grow their business in the right direction … and, where possible, distribute their product.”
Clark said there exists a funding gap between technology and the real estate industry, which the fund seeks to bridge.
“We are grateful for the support received from our founding investors and look forward to delivering for them while creating a meaningful and lasting positive impact on the markets in which we operate,” said Clark and REdimension Capital co-founder Matthew Marshall.