Servitized business model innovation as a catalyst for circular real estate in South Africa: a transition management perspective

Abstract

Purpose This article examines the role of servitized business model innovation (SBMI) in facilitating the transition to circular economy (CE) performance within the real estate sector, with a specific emphasis on the South African built environment. It analyses how moving from asset ownership to service provision can advance sustainability, resource efficiency and decarbonisation objectives. Design/methodology/approach This study used a qualitative research approach through semi-structured interviews with stakeholders from public and private property development organisations. Participants were purposefully selected to represent different management levels: strategic, tactical and operational, to provide an overall view of SBMI throughout the real estate value chain. Findings The research identifies that SBMI supports circular real estate practices, including building lifecycle extension, shared-use models and regenerative resource strategies. In the South African context, servitized approaches such as energy-as-a-service, space-as-a-service and circular retrofitting are described as potential methods to separate value from material consumption. Transition management is discussed as a governance framework to address systemic barriers, coordinate stakeholders and facilitate CE implementation. Practical implications The study proposes a framework to assist property developers, urban planners and policymakers in developing circular-ready business models and addressing sector changes related to sustainable, net-zero real estate in South Africa. Originality/value This article introduces a novel integration of SBMI and transition management as a dual lens for transforming traditional, linear property systems. It addresses a critical research gap in CE transitions in the Global South.