South Africa's R151bn Public Property Portfolio Faces a Visibility Test

South Africa's public-sector property portfolio, valued at around R151 billion and spanning more than 80,000 properties, holds significant untapped value that better data and active management could unlock, according to a corporate real estate executive.

For John Jack, chief executive officer of Galetti Corporate Real Estate, the scale of the portfolio represents enormous potential. Addressing the 16th Annual Public Sector Property & Asset Management Conference, he argued that data, visibility and active portfolio management could help government unlock greater value from the property it already owns. "The public sector has an extraordinary asset base," he said. "The question is how we create greater visibility around those properties so that better decisions can be made about what each asset could become."

By comparison, listed real estate investment trusts hold far smaller portfolios: Redefine has around 228 domestic properties valued at R67.8 billion, while Growthpoint has approximately 300 worth R65.6 billion, excluding offshore assets. REITs provide a useful example because their dedicated asset managers continuously monitor leasing, occupancy, income, capital expenditure and the strategic role of individual assets — a discipline, Jack argues, that government could adapt to manage what it owns.

At a scale of more than 80,000 properties, no single person could be expected to know every asset intimately, so the opportunity lies in building systems that let decision-makers see the portfolio clearly and consistently. Jack said decisions generally fall into three broad categories — hold, sell or repurpose — and 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," he said.

He cited recent Western Cape-focused landlord Spear REIT, which sold Hamilton & Chiappini House for R107 million at a 33% premium to its 2024 acquisition price and redirected the proceeds toward acquisitions and development while securing R1.4 billion in new acquisitions and investing R140 million in new industrial development. Redefine, he noted, has described its Polish logistics platform as offering strategic "optionality" that could either remain a long-term income-producing asset or become a source of future disposals and capital recycling.

Jack pointed to the growing conversion of office buildings for residential use as an example of how an asset's value can change when its use changes. "Sometimes there is nothing wrong with the building. The opportunity is simply to use it differently," he said, adding that different assets may require different routes to market, from private treaty sales to auctions or sealed-bid processes. "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."