Property group Fairvest is positive that its township retail assets will be able to tap into its R486-million investment in Onepath Investments (OPI).

OPI is the owner of digital infrastructure assets, and Fairvest’s investment has funded the acquisition of the fibre and related infrastructure leased to fibertime, a fibre network operator and Internet service provider catering specifically to the South African township market.

Fairvest is a JSE- and A2X-listed South African real estate investment trust (Reit), with a portfolio worth R12.5-billion. Its property portfolio comprises 75 retail, 28 office and 25 industrial properties.

fibertime’s pay-as-you-go model offers fast fibre Internet (uncapped, 100 Mbps) for R5 per device per 24 hours, and includes free equipment and installation. 

In the last three years, the company has rolled out fibre to more than 200 000 homes in townships and low-income areas in South Africa.

Fairvest says it intends to utilise its OPI investment to enhance its traditional retail properties.

“The investment aligns closely with Fairvest's core retail strategy and target market of serving low-income, high-density communities in under-serviced areas,” says CEO Darren Wilder.

“Serving communities with cost-effective digital access and data solutions is transformative in improving educational and employment outcomes, fostering entrepreneurship, creating business opportunities and reducing income inequality.

“As these communities do better, it also enhances Fairvest's core retail market.

“Globally, the returns from digital assets underpin some of the best-performing Reits, benefiting from growing structural demand that is not tied to economic cycles,” adds Wilder.

“In addition to attractive direct returns, [the] investment provides us with opportunities to enhance the lives of communities surrounding our retail centres, while it also opens up new areas for expansion, allows us to engage more deeply with communities, collect data, improve our marketing efforts and drive foot traffic to our centres.”

In short, and, in practice, Fairvest’s retail centres will benefit directly from any improvement in the financial standing of the surrounding communities.

These centres will also be able to enhance their marketing efforts as they will have access to better data as to where spending patterns originate.

The centres will also be able to offer loyalty awards and run specials in the form of fibre vouchers to increase footfall.

Fairvest says South Africa continues to have an enormous appetite for reliable and fast Internet.

However, the cost of fibre infrastructure has historically acted as a brake on this demand.

There are an estimated 10-million to 15-million homes in South African townships with households earning less than R5 000 a month, whose Internet needs are currently inadequately serviced, mainly by mobile operators, through more expensive and less effective connectivity, notes the company.