<\/p>\n
The Department of Public Works and Infrastructure (DPWI) is close to appointing the project manager for the establishment of the South African National Property Company (SANPC), which will manage about 88 000 state-owned buildings and more than five million hectares of land, valued at more than R150 billion.<\/p>\n
Minister of Public Works and Infrastructure Dean Macpherson told Moneyweb on Friday he was not in a position to state when the SANPC will be fully operational, but confirmed that his department is \u201cclose to appointing the project manager\u201d for the entity and a formal announcement will be made in due course.<\/p>\n
Read:
SA to create state firm to manage R155bn property portfolio
South Africa aims to replicate Telkom\u2019s success with property firm
South Africa taps Gulf know-how for $9.5bn property plan<\/p>\n
Bloomberg reported this week that Middle East sovereign wealth funds, backed by trillions of dollars in assets, had advised South Africa to create a fundraising vehicle as part of a plan for a new state firm that will manage its property portfolio.<\/p>\n
The creation of such a fund is already being planned.<\/p>\n
\u2018Sophisticated investment vehicle\u2019<\/p>\n
Macpherson said on Friday the DPWI development fund will be attached to the SANPC.<\/p>\n
It will be a sophisticated investment vehicle operating on private equity principles, and will raise capital for \u201cpredetermined purposes and timeframes\u201d.<\/p>\n
An example would be a South African Police Service (SAPS) Modernisation Fund that would raise capital specifically for the renovation, restoration, and maintenance of a ring-fenced portfolio of police stations.<\/p>\n
\u201cInvestor returns are secured by the ongoing accommodation charges paid by SAPS for these improved service delivery points.\u201d<\/p>\n
Macpherson said the SANPC will operate with private-sector governance discipline and revolutionise the way in which government interacts with the private sector.<\/p>\n
Its purpose is to move the state from being a passive landlord to becoming an active master developer, creating modern real estate platforms through four strategic pillars.<\/p>\n
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Pillar 1 \u2013 Government precinct developments<\/p>\n
Macpherson said the DPWI will consolidate scattered government departments into modern, energy-efficient and integrated civic precincts, delivered through public-private partnerships\u00a0(PPPs).<\/p>\n
\u201cIn doing so, we can convert wasteful private lease expenditure into permanent public equity backed by sovereign tenants.\u201d<\/p>\n
Macpherson earlier this month announced that the DPWI has plans to redevelop the vandalised Telkom Towers precinct and two other government buildings in Pretoria\u2019s central business district (CBD) at a cost of R4.56 billion.<\/p>\n
Read: Telkom Towers part of R4.5bn revival plan<\/p>\n
It expects the total project to create more than 12 700 construction jobs and unlock 212 000m2 of gross leasable area for the DPWI to use to generate income for the state.<\/p>\n
Macpherson stressed that government will not be investing this amount into the planned project and that it is effectively an opportunity for the private sector to invest in government-owned infrastructure, operate it, develop it, manage it and then return it after a period of time.<\/p>\n
\u201cThey will make their money over time from lease payments that government will make for those departments that occupy this area.\u201d<\/p>\n
Pillar 2 \u2013 Urban redevelopment and smart cities<\/p>\n
Macpherson said this pillar will involve\u00a0\u201cunlocking strategic parcels of underutilised state land, including former military bases and state estates, for large-scale mixed-use urban regeneration, commercial activity and affordable housing\u201d.<\/p>\n
He declined to comment to Moneyweb on how many former military bases form part of this initiative other than to say that \u201cit\u2019s a few\u201d.<\/p>\n
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And that an announcement will be made in due course.<\/p>\n
Pillar 3 \u2013 Blue economy and coastal infrastructure<\/p>\n
Macpherson said this pillar will see the transformation of small harbours and coastal properties into vibrant, mixed-use maritime hubs integrating fishing, commercial real estate, hospitality and marine tourism.<\/p>\n
Pillar 4 \u2013 Social asset allocation<\/p>\n
Macpherson said this pillar is where commercial monetisation is not appropriate but stressed that state property must still serve the public good.<\/p>\n
\u201cOver the past financial year, we allocated 46 state-owned properties for GBVF [gender-based violence and femicide] shelters and youth skills-development centres.\u201d<\/p>\n
Revenue and capital<\/p>\n
Macpherson said the SANPC\u2019s three distinct revenue and capital streams would be coupled to these strategic portfolios, one of which is the development fund attached to the SANPC.<\/p>\n
He said the other two are accommodation charges, and the reliable long-term cash flow generated from state tenants and secured by National Treasury and PPPs.<\/p>\n
Macpherson said the market-related amounts from accommodation charges creates a predictable income stream where surpluses are reinvested and income is ring-fenced to secure project-financed transactions.<\/p>\n
\u201cThis provides a \u2018shield\u2019 for investors.\u201d<\/p>\n
Macpherson said PPPs will serve as the primary mechanism for facility-specific developments, adding that private parties will form joint ventures and raise their own funding to participate in ring-fenced projects with a determined risk allocation between public and private partners.<\/p>\n
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President Cyril Ramaphosa announced the establishment of the SANPC as a professional, commercially driven asset-management and development vehicle in his State of the Nation Address in February.<\/p>\n
State-owned residential properties<\/p>\n
Macpherson in July requested DPWI Director-General Sifiso Mdakane to conduct a comprehensive investigation into the 6 238 state-owned residential properties allocated to various user departments and occupied by government officials across the country \u2013 and to develop a comprehensive strategy for the disposal of properties that are not required for legitimate operational purposes.<\/p>\n
He said 3 626 of these properties are situated in KwaZulu-Natal, 566 in the Western Cape and 407 in Gauteng.<\/p>\n
Read:\u00a0Government bets R155bn property portfolio can fund growth<\/p>\n
Macpherson said at the time that an estimated R39.6 million was spent from the DPWI\u2019s day-to-day maintenance budget during the 2025\/26 financial year although the available expenditure information relates to only 108 of the 6 238 properties.<\/p>\n
He said on Friday that South Africa holds one of the largest public property asset bases on the African continent, comprising about 88 000 state-owned buildings and more than five million hectares of land, valued on DPWI\u2019s asset register at more than R150 billion.<\/p>\n
Macpherson said historically this enormous portfolio was managed passively through fragmented, paper-based administrative systems.<\/p>\n
\u201cWhile state properties sat vacant, dilapidated or underutilised, government continued to spend an indefensible R5.6 billion to R6 billion every year on private-sector leases.<\/p>\n
\u201cThis is further compounded by the increased maintenance backlog we are facing as a department, which has ballooned to R28 billion.<\/p>\n
\u201cThis irony cannot be allowed to continue.\u201d<\/p>\n
#State #property #shakeup #starting #form<\/p>\n","protected":false},"excerpt":{"rendered":"
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