Public Works Minister Dean Macpherson has unveiled a R155 billion property investment vehicle to transform under-utilised state assets into revenue-generating developments, create jobs, and provide housing near transport and economic hubs.
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Public Works and Infrastructure Minister Dean Macpherson says the government is set to fundamentally change how South Africa manages its public assets, unveiling plans for a R155 billion property investment vehicle.
Macpherson said this during the State of the Nation Address (SONA) debate on Tuesday, describing it as the most significant shift in state property management since 1994.
Macpherson told Parliament that for decades, the state has owned the largest property portfolio in the country, yet many assets have stood vacant, vandalised, hijacked, or underutilised.
At the same time, the government spends up to R6 billion a year leasing private buildings, while prime public property remains unused.
“We own prime property that stands vacant. Yet we pay rent for plush offices,” he said.
According to Macpherson, the current model was never designed to build value, making reinvestment in maintenance and upgrades almost impossible.
The result, he said, has been “decay, inefficiency and lost opportunity.”
The new property investment vehicle is intended to reverse that, creating a professionally governed platform that consolidates income-generating and strategically located assets into a single structure with the mandate to unlock value for reinvestment.
He explained that the reform will establish a verified, digitised asset register, providing a single source of truth covering ownership, condition, leases, valuation, and performance.
For the first time, he said, the state will manage its property portfolio with real-time data rather than fragmented spreadsheets.
The reform also separates the roles of owner, manager, and developer, introducing professional property management expertise to run leases, maintain assets, plan lifecycles, and monitor tenant performance while building book asset value.
The vehicle will create structured, long-term development rights that allow private capital to invest in precinct upgrades, mixed-use housing and redevelopment, and will generate revenue to support maintenance, moving the state from reactive to planned asset management.
Macpherson pointed to the Government Precinct Programme in Tshwane as an example of what the platform can achieve.
He said Phase 1 alone includes 30 projects, more than one million square metres of development, and roughly R33 billion in investment, which could eliminate over R400 million in annual lease costs and deliver a portfolio valued between R45 billion and R55 billion once complete.
Phase 2 will focus on refurbishing under-utilised buildings to catalyse urban regeneration. he said.
He also highlighted the jobs potential, projecting nearly 100 000 direct and indirect jobs across the delivery cycle, and up to R60 billion in broader urban economic activity.
Well-located public land in inner cities will be used for housing near transport and employment, while hundreds of residential properties will be offered to nurses, police officers and teachers.
Macpherson said Telkom Towers, among other under-utilised assets, have cost the state almost R1 billion but remain unusable.
He said the department is finalising a Request for Information to convert it into productive accommodation.
Defence land at Youngsfield and Wingfield also has the potential to create new communities, reduce maintenance costs, and restore dignity, said Macpherson.
“Under structure, they become housing and mixed-use development nodes for the next generation of homeowners,” Macpherson said.
He added that the investment vehicle will attract untapped investment, create jobs, and mark the beginning of a new era in state asset management.
hope.ntanzi@iol.co.za
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