WATER
real
estate
&
making the connection
For decades residential real estate developers and managers have worked within
a given set of relationships between themselves, the municipality as service
provider, the state as regulator and the investors whose primary interests they
serve. That set of relationships has been based on a robust set of assumptions,
so the decision-making process has become routine and institutionalised.
BUT WHAT HAPPENS IF THE CORE ASSUMPTIONS CHANGE?
Let us examine some of those core assumptions so that we understand the
implications of any change that might happen. Arguably the absolute foundation
of any real estate development is the assumption that the municipality will
provide five basic services – roads, electricity, water, sanitation and refuse
removal. This means a routine decision-making process each time a new
development is launched, much like a checklist.
This changed when Eskom crashed and suddenly the assumption of assurance
of supply (AoS) – the guarantee of a given quantum of energy delivered to a
given entity at a given time and at a given price – was found to be flawed.
After initial anger and then turmoil, adaptive responses came in the form of
standby generator sets. So it is the AoS assumption that is critical to the raft
of municipally delivered services that enable development to occur in the first
place.
Now let us apply the AoS assumption to water. Here there are two major
elements to be disaggregated – potable water and waste water. AoS for potable
water is the guarantee of a given volume at a given pressure and a given quality