Public Works and Infrastructure Minister Dean Macpherson has provided some more high-level details on a plan to use a ringfenced property investment vehicle to begin to unlock value from the State’s extensive portfolio of buildings and properties.

While these holdings are collectively valued at about R155-billion, many of the properties currently stand vacant, are decaying or are underused. In addition, government spends up to R6-billion every year leasing private buildings.

In his State of the Nation Address, President Cyril Ramaphosa announced that government would establish a professional State Property Company this year to “transform the 88 000 buildings and five-million hectares of land owned by the State into professionally managed engines of growth and development”.

In his response to that speech, Macpherson described the initiative as the “most significant reform of State property management since 1994”, arguing that the professionalised entity would consolidate income generating and strategically located assets into a single structure with a verified and digitised asset register.

The roles of owner, manager and developer would also be separated, which Macpherson said would create space for private capital to invest in precinct upgrades, mixed-use housing and redevelopment.

“The vehicle includes a dedicated development capability, funding bulk services and precinct preparation so underutilised land becomes bankable projects. Clear project pipelines will allow private sector partners and sovereign funds to participate with certainty.”

Macpherson argued that the initiative would drive large-scale investment and job creation, citing the Government Precinct Programme in Tshwane and Youngsfield housing development in Cape Town as examples of how lease expenditure and vacant land could be converted into capital formation, urban regeneration and jobs.

He also announced that well-located public land in the Johannesburg inner city would be used for housing, and that hundreds of residential properties would be offered to nurses, police officers and teachers.

A request for information was also being prepared in relation to turning the disused Telkom Towers in Pretoria into accommodation for government departments.