South Africa’s government property portfolio is vast – but how much value is hiding in plain sight? With more than 80,000 property assets estimated at around R151bn, the state controls a portfolio far larger than those of the country’s major listed property groups.
Source: Supplied. John Jack, chief executive officer of Galetti Corporate Real Estate.
Redefine, for example, has around 228 domestic properties valued at R67.8bn, while Growthpoint has approximately 300 worth R65.6bn, excluding offshore assets. The scale raises a bigger question: does government have enough visibility to make the most of what it owns?
For John Jack, chief executive officer of Galetti Corporate Real Estate, that scale represents an enormous potential. “The public sector has an extraordinary asset base,” he says. “The question is how we create greater visibility around those properties so that better decisions can be made about what each asset could become.”
Jack recently addressed this issue at the 16th Annual Public Sector Property & Asset Management Conference, where he argued that data, visibility and active portfolio management could help government unlock greater value from the property it already owns.
Seeing the opportunity more clearly
Imagine being able to view a national property portfolio in one place: what is occupied, what is vacant, what generates income, where leases are approaching expiry, which buildings may have redevelopment potential and where there may be opportunities to bring assets to market.
For Jack, this kind of portfolio visibility is the foundation for better decision-making. “You cannot make a decision about a building you don’t have a full view of,” he says.
Real Estate Investment Trusts (REITs) provide a useful comparison. Their portfolios may be far smaller in terms of the number and value of individual properties, but dedicated asset managers continuously monitor leasing, occupancy, income, capital expenditure and the strategic role of individual assets.
The comparison is not about applying a purely commercial mandate to public property. Government assets serve a much broader range of operational, social and strategic purposes. The lesson lies instead in the discipline of understanding what is owned, how it is being used and what role each asset should play within the broader portfolio.
At a scale of more than 80,000 properties, no single person could be expected to know every asset intimately. The opportunity instead lies in building systems that allow decision-makers to see the portfolio clearly and consistently.
“That is where data visualisation becomes incredibly powerful,” says Jack. “Once you can see what you own, and understand how each asset is performing, you can start asking much more useful questions about what should happen next.”
Those decisions generally fall into three broad categories: hold, sell or repurpose.
Underutilised assets can create new value
Jack believes that asset disposal should not be the automatic default for an underutilised property.
“Depending on the asset, the strongest outcome may involve securing a new tenant, investing in the property, redeveloping it or adapting it to an entirely different use. In other cases, selling may release capital that can be redirected towards higher-priority assets or public needs.
“This is a discipline long used by REITs, where portfolios are continually assessed and capital is moved according to where it can create the most value.”
Recent activity from Spear REIT Limited illustrates the principle. The Western Cape-focused landlord sold Hamilton & Chiappini House for R107m, achieving a 33% premium to its 2024 acquisition price, and redirected the proceeds toward acquisitions and development. During the same period, it secured R1.4bn in new acquisitions and invested R140m in new industrial development.
Redefine has adopted a similarly flexible approach, describing its Polish logistics platform as offering strategic “optionality”: it can remain a long-term income-producing platform or become a source of future disposals and capital recycling.
“The lesson is not that every asset should be sold,” says Jack. “It is that every asset should have a purpose. Sometimes the opportunity lies in holding it, sometimes in improving it and sometimes in unlocking the capital for something else.”
Repurposing offers another avenue. Jack points to the growing number of office buildings being converted for residential use as an example of how the value of an asset can change when its use changes.
“Sometimes there is nothing wrong with the building. The opportunity is simply to use it differently.”
Turning decisions into outcomes
Once the right strategy has been identified, the next opportunity lies in execution.
Different assets may require different routes to market, from private treaty sales to auctions or sealed-bid processes. The appropriate method depends on the complexity of the property, the buyer pool, the need for transparency and whether competitive price discovery is important.
“The route to market should fit the asset,” Jack says. “The objective is to create a process where the right buyers can see the opportunity, understand it and participate with confidence.”
The same principle applies to leasing and redevelopment opportunities. Greater portfolio visibility can help identify where private-sector tenants, investors or development partners may be able to unlock value from assets that are currently underused.
For Jack, this is where collaboration between public-sector asset owners and the broader property industry can become especially valuable.
“Government already owns the assets. The opportunity is to make them more visible, understand what each one could contribute and then connect those opportunities with the market.”
Public value, not just property value
The ultimate measure of a public property portfolio is not simply how much rental income or sale proceeds it can generate.
Some assets exist because they fulfil essential operational, social or strategic purposes. Others may generate revenue, attract investment, support housing or development, or release capital for other priorities.
The opportunity lies in understanding that role clearly. “A public asset does not have to maximise financial return to be valuable,” Jack says. “But if we understand what we own, we can make much more informed decisions about how each property can contribute.”
For a portfolio of this scale, even incremental improvements in how assets are understood, managed and positioned could translate into significant value.
“The exciting part is that the opportunity already exists,” Jack concludes. “The assets are there. The next step is creating the visibility and information needed to unlock their potential.”
