The government spends R6 billion leasing offices while thousands of state buildings sit empty

South Africa’s government is spending billions of rand leasing private office space while thousands of state-owned buildings remain vacant or underused.

Portfolio Committee on Public Works and Infrastructure chairperson Carol Phiri told Newzroom Afrika that the committee was not satisfied with the department’s explanation for the continued use of private leases.

According to the committee, the government owns about 88,000 buildings, but departments continue to lease properties from private landlords.

“We were very much concerned about why we are still spending a lot of money on private leases while we still have unutilized buildings,” Phiri said.

She pointed to Telkom Towers, Public Works House and an MTN building in Durban as examples of properties that are not being fully used.

Phiri said officials told the committee that plans were in place to refurbish some of the unused buildings. However, she said the explanation did not adequately show that public funds were being used efficiently.

Telkom Towers has become one of the committee’s main concerns. The property has already absorbed about R1 billion in state investment, but it remains underused.

Phiri said the committee was also concerned about the ongoing costs of maintaining the building. Security and cleaning services are still being paid for, despite the building not being used for its intended purpose.

The department estimated these costs at about R6.8 million a month, although Phiri said officials had not provided an exact figure. “Such a huge amount of money, which is unacceptable.”

The committee was also expecting a forensic report into the project. However, Public Works and Infrastructure Minister Dean Macpherson told the committee that the existing report was not satisfactory.

A second forensic investigation has therefore been commissioned. The committee will review the first report upon receipt, with assistance from Parliament’s legal team.

Taxpayer money goes down the drain

The committee also raised concerns about the structure of the government’s private leases. Phiri said about 500 leases are currently on a month-to-month agreement.

She described this as unacceptable, particularly when the government owns buildings that could potentially be used instead. “It looks like we’re not serious,” she said.

The department has proposed refurbishing four buildings at a cost of about R4.1 billion, which is supposedly much lower than the estimated R10.9 billion it would need to construct new buildings.

However, Phiri pointed out that this does not explain why the government is not making greater use of its existing properties.

The department has also raised the possibility of using public-private partnerships (PPPs) to refurbish some buildings, although the committee was not yet convinced that this was the right approach.

Phiri critiqued the proposal to have private companies refurbish and operate buildings for up to 20 years before returning them to the government.

She said the committee was not convinced the model offered value for money, particularly given the long period involved and uncertainty over the condition of the buildings when they are eventually returned.

“You try to convince me that after 20 years, you’ll give back the building to government in a good state. Who’s sure and certain about that?”

She also questioned whether poor coordination between government departments is contributing to unnecessary rental costs.

The committee had been told that some departments, including the South African Police Service, no longer wanted to use certain state-owned buildings.

At Telkom Towers, for example, police officials told the committee that they no longer wanted to occupy the building and suggested that it be offered to another government department.

However, Phiri said the building was not currently suitable for employees because of its condition and inadequate ventilation.

She said the solution was to refurbish the property and find another government department that could use it. The same issue applies to other unused government buildings.

The committee had met with the Department of Social Development, which said it lacked sufficient office space in KwaZulu-Natal. However, there is already an available MTN building in Durban.

Of the building’s 11 floors, only one is occupied by the Department of Justice and Constitutional Development. “Why are you not giving other client departments the space to be accommodated?”

Thousands of state-owned properties under investigation

The concerns come as Public Works and Infrastructure are already investigating thousands of other state-owned properties.

In July 2026, Macpherson ordered an investigation into 6,238 government-owned residential properties allocated to departments and occupied by government officials.

The department said almost R40 million was spent on maintenance for 108 of those properties during the 2025/26 financial year.

Macpherson said the government should not retain residential properties unless there is a clear operational reason to do so.

The pending investigation is expected to determine which government properties should be retained, repurposed or sold.

A written reply tabled in the provincial legislature revealed that the broader property problem is also visible in Gauteng.

Here, the Department of Education spends more than R230 million a year on privately leased district offices. Ten of Gauteng’s 15 education district offices are located in privately owned buildings.

The figures include R183.2 million in annual rent and R47.2 million for municipal services, excluding costs such as security, cleaning and maintenance.

Phiri stressed that the answer to this leasing problem is not more promises but better use of the buildings the state already owns.

She called on the department to put underused buildings back into service and urged the minister to focus on implementation. “Stop speaking, but let’s see actions.”