JOHANNESBURG, Gauteng — Lawmakers are heavily scrutinizing the management of the South Africa state property portfolio after revelations that the government is spending billions on private rentals while its own buildings sit idle. During a recent parliamentary oversight session, the Public Works Committee demanded answers regarding the immense financial strain caused by outsourcing state accommodation to private landlords.
Despite owning a massive footprint of 88,000 public buildings and land parcels, the state has severely underutilized these assets. Instead, it relies heavily on the private rental market. The lease budget was approximately 5.9 billion rand for the 2025/2026 period. For the current financial year, the budget sits at roughly 6.3 billion rand, with projected spending expected to surge to 7.7 billion rand.
Public Works officials testified that they are currently managing and renegotiating over 5,000 leases. More than 500 of these are on precarious month-to-month agreements, which exposes the state to volatile and potentially higher rental costs. Furthermore, officials noted that state facilities are generally not in good condition, with some internal clients paying as little as 23 rand per square meter—a rate that leaves virtually no budget for necessary maintenance or upgrades.
Members of Parliament (MPs) argued that simply negotiating cheaper leases is an insufficient solution. They highlighted a glaring financial “Catch-22” within the current system: the government pays private landlords because its own facilities are in disrepair, yet it continues to drain public funds on rent rather than investing in the refurbishment of assets it already owns. Critics in the committee described the situation as a system that is deliberately leaking public money into private hands, prioritizing private interests over the public good.
A major point of contention during the hearings was the government’s heavy investment in properties like Telkom Towers in Durban. Despite spending over a billion rand on the facility, it remains largely empty, failing to realize the asset’s potential.
Furthermore, the committee uncovered an awkward irony within the portfolio’s management. Despite the sheer size of the government’s real estate holdings, officials admitted there is a lack of suitable accommodation for senior executives in certain locations, including DPWI Minister Dean Macpherson.
Defending the current strategy, department spokespersons and officials explained that leasing is often a faster alternative to refurbishing or constructing new state-owned spaces. They noted that many lease requests were for spaces smaller than 5,000 square meters, which allowed departments to bypass extensive feasibility studies and proceed directly to lease procurement processes.
However, MPs remain skeptical about whether the government’s long-promised property turnaround strategy is yielding tangible results on the ground. To address the crisis, the Department of Public Works and Infrastructure (DPWI) stated it is collaborating with the National Treasury on a broader renewal of state assets. This rejuvenation program aims to completely modernize buildings, install new energy-efficient systems, and ultimately reduce the state’s reliance on expensive private leases over time.
Until a decisive plan is executed to determine which buildings should be sold, refurbished, or occupied, private landlords will continue to collect rent while the state’s own portfolio gathers dust.
