Faculty of Engineering, Built Environment and Information Technology
School for the Built Environment
Department of Construction Economics
Selected Highlights from Research Findings
Production statistics and perceptions of small-scale sugarcane farmers in Mpumalanga were assessed in view of diminishing yields and to determine the feasibility to use the project as a template for future land reform development. Only 19 percent of the randomly selected small-scale farmers achieved results similar to their commercial counterparts, whereas 56 percent failed to meet the break-even point. The poor performance was attributed to lack of managerial, financial and cultivation skills, meagre interest in farming, and financial restraints. In order to preserve scarce assets (fertile soil and water resources) it is essential to introduce an accelerated training and assistance program in a pragmatic, coherent manner and with due rewards, based on minimum standards.
Contact person: Prof CE Cloete.
A comprehensive survey of the Facilities Management (FM) industry in South Africa, undertaken in conjunction with the journal PMR Africa, revealed that the annual expenditure on External Facilities Management is about R140 million, representing an estimated 877,000 square metres, with about R3 per sqm per month spent on soft services and R10 on hard services. The annual expenditure on FM by companies doing their own FM is about R523 million, representing an estimated 3,263,000 square metres. Of the 174 respondents who handle their FM internally, 39 percent have never thought of outsourcing to external Facilities Managers, 47 percent have considered outsourcing FM services but decided against it, and 5 percent used to outsource but do not do it any more. Three FM companies were found to dominate half of the market.
Contact person: Prof CE Cloete.
Investigations into the availability and affordability of housing and housing finance in Malawi's major urban areas indicated that finance from the formal sector is accessible to fewer than 35 percent of the urban population and that less than 16 percent of households in the major urban areas can afford an average house. No government subsidies are available for end users and development financing is limited and extremely dear. The contribution from non-conventional finance sources to housing finance is negligible. Various possible approaches to improve housing delivery were suggested, including incentives for private sector involvement, additional forms of legal ownership, site and service and materials loans schemes, the scrapping of surtax on basic building materials, coordinated land-use planning, a housing tax for the implementation of subsidies, subsidies from developed countries, the formation of cooperatives and the implementation of securitisation.
Contact person: Prof CE Cloete.
The purpose of the research was to identify problems, provide possible solutions and to stimulate debate relating to questions such as: Are quantity surveyors suitably equipped to address future challenges? Are their services rendered in South Africa appropriate to the client's needs? Do they sell unique products? Can they possibly make a larger contribution, and how? Globalisation, improvement and expanding of services, exporting services, innovative trends of procurement, marketing services, strategic planning for a quantity surveying practice and future impacts of technology were addressed. A future perspective for quantity surveying services is the central theme. In summary, it was concluded that varied challenging opportunities are available locally and abroad. Furthermore, they are available to the Association of South African Quantity Surveyors, the innovative practice or the ambitious individual to exploit, further pursue and advance.
Contact person: Prof DG Brümmer.
Alternative dispute resolution (ADR) is extensively used in private sector construction contracts. The public sector, however, has been slow to incorporate binding ADR as part of dispute resolution systems in construction contracts. Recent movements to incorporate it have been limited to non-binding options. This study focused on ADR in the local and international public sector construction industry. The advantages and disadvantages of various options were assessed. Fifteen options were explored to determine appropriate fields of application. Taking the benefits into account, it was found that appropriate dispute resolution systems can be designed for public sector contracts. An aspect that is questioned is the oversimplification of the application of the same ADR method for very different types of projects and stages of disputes. It was concluded that a stepped approach using the appropriate ADR option to deal with disputes at different stages of a conflict facilitates the dispute resolution process.
Contact person: Prof DG Brümmer.
A study assessed two models for real estate markets. The models concerned are the Fisher-DiPasquale-Wheaton (FDW) model, and the Real Estate Econometric Forecast Model (REEFM). The FDW model provides a diagrammatic explanation of the behaviour of the property market and the REEFM is an econometric model based on statistical principles to forecast market behaviour by interpretation of specific given variables. Application of the FDW model to the Pretoria office market proved the model to be extremely sensitive to changes in certain key variables. It was found to be of considerable explanatory and pedagogic merit, but to have limited value as an investment tool. Application of the REEFM to decentralised office space in the major cities in South Africa revealed a close correspondence to actual trends, indicating that it can be used for forecasting in the office market.
Contact person: Prof CE Cloete.
A novel computer model for the application of buy-out options in commercial leases has been developed. The model provides a negotiating platform to enable a lessee to enter into a long-term lease (e.g. 10 years), which it may break at its option at defined intervals of the lease (e.g. after year 5, year 6, etc.). If it decides to do this, then the lessee must pay a predetermined amount to the lessor (the buy-out cost). The approach provides advantages to both parties - the lessee receives the flexibility it requires in respect of the lease term, along with a potentially lower initial rental, whilst the landlord is provided with a greater level of financial certainty, thus reducing investment risk. The model has generated good interest in Australia where it is already being applied in a number of cases.
Contact person: Prof CE Cloete.
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