An Investigation into the Strategic Importance of GBFIs within the Listed Property Market Saul Nurick Alexandra Morris Jody Schofield Department of Construction Economics and Management University of Cape Town

Background to the Research REITsGBFIs Strategic Decisions Companies Property Sectors Relatively new financial structure in SA. First REIT est. in Green building in its infancy in SA. GBCSA est. in 2007.

Green Building Features and Initiatives Feature (reduces resource consumption) Initiative Increases resource consumption + environmental impact

Research Question What are the key decision-making patterns and how do they influence the implementation of GBFIs in the South African listed property market?

Research Proposition GBFIs form part of strategic decisions across the different property companies and across the different property sectors within the listed property market.

Research Method

Pattern-Matching Adapted from Trochim (1989) Theories Ideas Theoretical Pattern Observations Data Observed Pattern Pattern-Matching Literature Empirical Findings

Patterns Drawn Proactive versus Reactive Decision Strategies Property Sectors Triple Bottom Line (TBL)

Findings Case Study 1 (CS1) Case Study 2 (CS2) Case Study 3 (CS3) Cross-Case Analysis

Respondents Case Study 1 (CS1) Non-Executive Director (R1-1) Financial Manager (R1-2) Case Study 2 (CS2) Development Manager (R2-1) Regional Development Manager (R2-2) Regional Operations Manager (R2-3) CEO of Subsidiary Company (R2-4) Case Study 3 (CS3) Development Manager (R3-1) Facilities Manager (R3-2) Operations Manager (R3-3)

Case Study 1 March Listed on the JSE in March In the process of becoming a REIT.

Case Study 2 February Listed on the JSE in February Obtained REIT status in September 2013.

Case Study 3 October Listed on the JSE in October Obtained REIT status in July Included in JSE’s Social Responsibility Index in December 2009.

Cross-Case Analysis Proactive vs. ReactiveDecision StrategyProperty SectorsTBLChallenges CS1 Primarily Reactive. CS1 strategy is to reduce current costs, and by doing so remain competitive to retain tenants. Not much differentiation between the influence of GBFIs on strategies across property sectors. The primary strategy in terms of TBL principles is an economic strategy. Infancy of the green building movement results in challenges regarding the implementation of GBFIs. CS2 Fairly proactive, however, some drivers indicate a reactive approach. Initially, C2 was driven to reduce costs, however, the strategy is considered over the long term through in- depth analyses in order to ensure benefit to tenants and financial feasibility. Not much differentiation between the influence of GBFIs on strategies across property sectors. The primary strategy in terms of TBL principles is an economic strategy. Infancy of the green building movement results in challenges regarding the implementation of GBFIs. CS3 Primarily Proactive.The primary strategy to implement GBFIs is to gain a competitive advantage in the South African listed property market, and to remain competitive internationally. Development of strategies over the different property sectors in GBFI implementation. CS3 considers all three TBL aspects in their decision-making. No challenges faced with regards to the implementation of GBFIs, but rather in the management of GBFIs.

Cross-Case Analysis Proactive vs. ReactiveDecision StrategyProperty SectorsTBLChallenges CS1 Primarily Reactive. CS1 strategy is to reduce current costs, and by doing so remain competitive to retain tenants. Not much differentiation between the influence of GBFIs on strategies across property sectors. The primary strategy in terms of TBL principles is an economic strategy. Infancy of the green building movement results in challenges regarding the implementation of GBFIs. CS2 Fairly proactive, however, some drivers indicate a reactive approach. Initially, C2 was driven to reduce costs, however, the strategy is considered over the long term through in- depth analyses in order to ensure benefit to tenants and financial feasibility. Not much differentiation between the influence of GBFIs on strategies across property sectors. The primary strategy in terms of TBL principles is an economic strategy. Infancy of the green building movement results in challenges regarding the implementation of GBFIs. CS3 Primarily Proactive.The primary strategy to implement GBFIs is to gain a competitive advantage in the South African listed property market, and to remain competitive internationally. Development of strategies over the different property sectors in GBFI implementation. CS3 considers all three TBL aspects in their decision-making. No challenges faced with regards to the implementation of GBFIs, but rather in the management of GBFIs. Due to infancy of green building movement in SA.

Conclusions CS3 CS1CS2 PROACTIVEREACTIVE

Conclusions Refutation of the Research Proposition GBFIs form part of strategic decisions across the different property companies, but not across the different property sectors within the listed property market.

Thank you Questions