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Government turns to private property firms to breathe new life into unused public buildings

11th March 2022

Creamer Media Editor

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Public Works and Infrastructure Minister Patricia de Lille has unveiled a strategy for attracting government departments back to abandoned public buildings by entering into long-term lease agreements with private property companies, which will refurbish, repurpose and operate buildings over a 15- to 20-year lease period.

In a wide-ranging briefing hosted as a follow-up to President Cyril Ramaphosa’s recent State of the Nation Address, De Lille announced that the Department of Public Works and Infrastructure (DPWI) would pursue the project under its recently approved ‘Refurbish, Operate and Transfer Strategy’.

The strategy is premised on the private sector providing the upfront capital and resources to refurbish and repair the buildings and, where necessary, repurposing them for office use.

In return DPWI will secure the government tenants and will enter into long-term lease agreements with private property firms, which will return the asset to the State at the end of the agreement period.

Through the strategy, the DPWI aims to lure government departments, which are currently spending about R5-billion a year with private landlords, back to public buildings.

She acknowledged that many of the buildings in DPWI’s portfolio were in a poor state of repair and were racking up ongoing security costs without generating any revenue.

“In order to reduce the cost of letting in buildings from the private sector for use by government departments, we are now going to use more government buildings for government departments,” she said.

A proof-of-concept pilot project, involving five buildings, would be implemented soon.

In parallel, the DPWI would package a further 200 buildings for release under the strategy and De Lille reported that these buildings would “go out to the market in the next financial year”.

Edited by Creamer Media Reporter

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