How misused state property can fix housing and power growth

• South Africa owns vast land and buildings that can unlock housing, jobs and growth.
• A new state property company aims to turn dead assets into productive investments.
• Professional management and private partnerships are the real game changers.

The opportunity hiding in plain sight

‍South Africa’s housing crisis and weak economic growth are often treated as separate problems. They are not.

‍The state owns 88,000 buildings and 5 million hectares of land, yet still spends R6 billion a year renting offices from the private sector. At the same time, millions of South Africans live far from jobs, in informal or inadequate housing, while vast public assets stand vacant, vandalised or underused.

‍This contradiction represents one of the country’s biggest missed economic opportunities and potentially one of its biggest solutions.

A fundamental shift in how state property is used

‍Public Works and Infrastructure Minister Dean Macpherson has outlined what he describes as the most significant reform to state property management since 1994.

The plan, first announced by President Cyril Ramaphosa, is to consolidate these assets into a ring-fenced, professionally managed State Property Company effectively turning the government into a disciplined property investor rather than a negligent landlord.

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“We own prime property that stands vacant. Yet we pay rent for plush offices. We hold strategic land while people live in informal settlements. These contradictions end here,” Macpherson said.

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The aim is clear: flip state property from a liability into an income-generating asset that supports housing delivery, urban renewal and economic growth.

What the new state property company will do

‍At its core, the new vehicle is designed to operate like a modern real estate investment platform, not a bureaucracy.

According to Macpherson, it will:

• Consolidate income-generating and strategic assets into a single structure
• Create a verified, digitised asset register covering ownership, condition, leases, valuations and performance
• Apply professional asset management, development finance and property development skills
• Generate revenue to fund maintenance and reduce reliance on private leases
• Unlock land and buildings for affordable, mixed-use and civil servant housing

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“For the first time, the state will manage property with real-time data, not fragmented spreadsheets,” he said.

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Practical Rollout Plan: Turning assets into housing & wealth

‍This is not a theoretical exercise. A phased rollout is already emerging, with lessons drawn from pilot projects.

Step 1: Identify and classify assets

• Vacant or underutilised buildings suitable for residential conversion
• Strategically located land near transport and economic nodes
• Assets that can be sold, leased or redeveloped

Step 2: Professionalise governance

• Ring-fence assets from political interference
• Apply private-sector-grade governance, reporting and accountability
• Treat each asset as part of a long-term investment portfolio

Step 3: Partner with private capital

• Offer structured, long-term development rights
• Enable private developers to fund, refurbish and manage projects
• Focus on mixed-use, affordable and rental housing

Step 4: Reinvest revenue, not drain it

• Use rental and development income to fund maintenance
• Reduce the R6 billion annual lease bill
• Shift from reactive repairs to planned lifecycle management

Step 5: Scale through precinct development

• Regenerate inner-city and urban precincts
• Bring people closer to jobs, transport and services
• Stimulate local economies through construction and services

Proof of Concept: Tshwane shows what’s possible

‍A version of this approach has already been piloted through the Government Precinct Programme in Tshwane.

Phase 1 delivered:

• 30 projects
• Over 1 million square metres of development
• Approximately R33 billion in investment
• Potential elimination of R400 million a year in lease costs
• A completed portfolio valued at R45 - R55 billion

Phase 2 focuses on refurbishing underutilised public buildings to catalyse deeper urban regeneration.

The broader impact is significant:

• An estimated 100,000 direct and indirect jobs
• Up to R60 billion in wider urban economic activity

Why this matters for housing and the economy

‍If executed properly, this reform tackles multiple challenges at once:

• Housing supply: unlocking land and buildings for affordable rental and ownership
• Fiscal pressure: reducing lease costs and creating income streams
• Urban decay: regenerating inner cities and government precincts
• Job creation: construction, services and long-term property management
• Wealth creation: building a public asset base that grows over generations

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As Macpherson puts it: “Property must stop being a liability and start being an asset. This is how we generate wealth for the public, not just costs.”

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The Big Opportunity

‍South Africa does not lack land, buildings or opportunity. It lacks execution.

‍The proposed State Property Company represents a rare alignment between housing need, fiscal discipline and economic growth.

If governance is strong, data-driven and insulated from political interference, misused state property could become one of the country’s most powerful economic levers.

Turn vacant buildings into homes and idle land into precincts. Turn wasted assets into long-term wealth. This is not just a property reform. It is a nation-building opportunity.

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