Government dumping 801 unused properties in South Africa
The Department of Public Works and Infrastructure has identified 1,348 non-essential state properties for disposal—801 of which have been approved for the next steps in the process.
These properties are mainly residential assets, such as houses and vacant residential land, that are located across all provinces in the country.
The disposal process for the 801 properties is currently at the physical verification stage, the department said.
This phase aims to confirm the existence and condition of each property, determine their vesting status, and prepare them for referral to the Provincial State Land Vesting and Disposal Committee (PSLVDC) for recommendations on disposal.
The Minister of Public Works and Infrastructure, Dean Macpherson, said that after completing these steps, the regional offices will conduct feasibility studies and property valuations.
Following this, the properties will be submitted to the Minister for approval, which will allow the Supply Chain Management (SCM) processes to begin, including advertising the properties for sale.
No properties have been transferred to municipalities or private owners in the past two financial years, as the disposal programme is still in the preparatory and approval stages.
The 801 properties cleared for disposal must undergo the following steps:
- Feasibility studies and condition assessments
- Market valuations
- Ratification by the Land Affairs Board (LAB)
- Approval from the National Treasury (when applicable)
- Ministerial concurrence
“The Department is currently facilitating the transfer of certain properties to other government departments in terms of Section 42 of the Public Finance Management Act (PFMA),” Macpherson said.
These transfers include:
- Properties designated for transfer to the Border Management Authority (BMA) to enhance border control infrastructure.
- Properties assigned for transfer to various provincial governments, such as 23 land parcels to the Northern Cape and 8 land parcels to the Western Cape, to promote human settlements and improve overall service delivery objectives.
New state-owned company incoming
According to the Democratic Alliance, whose minister heads the department, the right-sizing of the state’s property portfolio will modernise how state-owned land and buildings are managed.
This will also reduce and consolidate the R6 billion in wasteful private leases, bringing this money back into state coffers and investing in its own asset portfolio.
Further measures in this space will be a new state-owned company to manage the government’s R155 billion property portfolio.
President Cyril Ramaphosa announced the new company during the State of the Nation Address.
“This year, we will begin the work to establish a professional State Property Company to transform the 88,000 buildings and 5 million hectares of land owned by the state into professionally managed engines of growth and development,” he said.
Expanding on this in March, Macpherson said there was a long-term value-creation opportunity in the company that could become an anchor for a sovereign wealth fund over time.
Scaling up the new firm’s portfolio to form the basis of a sovereign wealth fund would transform the state’s property assets into a “dividend-paying engine for the nation.”
While the government is by far the biggest owner of real estate in South Africa, years of neglect and graft have led to many buildings falling into disrepair or being taken over by squatters.
The DA said that public assets worth hundreds of billions have been locked into outdated and counterproductive systems for decades.
This has slowed infrastructure and service delivery, weakened financial sustainability, and denied communities the social and economic value these assets should generate.
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