Big plans for South Africa’s new R148 billion property SOE

South Africa is close to hiring a manager for its R148 billion property portfolio as it advances plans to establish a state-owned company to house its assets.

“We are finalising the appointment of a project manager or a program director,” Public Works and Infrastructure Minister Dean Macpherson said at a Foreign Correspondents’ Association of Southern Africa event in Johannesburg on Friday.

“I’m confident in the next couple of weeks we’ll be able to make that formal announcement,” and it will be someone that is trusted and experienced, he said.

The establishment of South African National Property Company, which will oversee 88,000 buildings and 5 million hectares of land, was announced by President Cyril Ramaphosa in his state-of-the-nation address in February.

Work has also progressed on the structural and policy framework. “We’re around 70% where we need to be to present the policy position for adoption,” Macpherson said.

He wants the company to replicate the success of telecommunications firm Telkom by bringing in private-sector investors and strategic partners. It is envisaged that the property company will eventually be listed and generate substantial dividends, the minister said.

Telkom was partially privatised in 2003 via an initial public offering on the Johannesburg Stock Exchange, with the government retaining a 41% stake and has a dividend payout ratio of 37.5%

Macpherson said his department plans to start disposing of at least 801 mostly residential properties in the current financial year.

“I cannot accept that we own 88,000 properties, and we never dispose of any of them,” he said. “I have directed the department” to get them onto the market, he added.