South Africa getting a new SOE

President Cyril Ramaphosa announced during his State of the Nation Address (SONA) that he will establish a new State-Owned Enterprise (SOE) to manage the government’s property portfolio. 

The President said that the work will begin this year to establish the new company, which will manage the state’s 88,000 buildings and 5 million hectares of land. 

Ramaphosa said these assets will be “transformed into professionally managed engines of growth and development” by the new SOE. 

This is after repeated calls for such an entity to be established by Minister of Public Works and Infrastructure, Dean Macpherson. 

“Nominally speaking, that portfolio is worth R148 billion, but we receive no investment against it, we do not leverage it, and we do not generate any income from it. It’s mad,” the Minister said during a recent podcast episode for his party, the Democratic Alliance (DA).

The Minister welcomed the SONA announcement on social media. “A new property investment vehicle will unlock the full value of our 88,000 property portfolio – helping to turn dormant state property assets into sites of investment and development.”

“This will bring an end to dilapidated buildings across our country,” he added. “We therefore welcome the President’s support. This reform will be critical in driving growth, creating jobs and putting public assets to work for South Africans.”

Macpherson first called for better management of the portfolio shortly after he was appointed in mid-2024. 

He said that the country needs to stop seeing Public Works as a department of bad buildings, and for transformation to begin, so that it can be seen as an economic delivery unit.

“We’re going to create an asset book that is worth hundreds of billions of rand that could possibly be traded, could possibly be sold for equity or can raise debt for social infrastructure,” he said at the time.

Government wasting R6 billion a year

In July 2025, asset management was again mentioned as a priority focus area in Macpherson’s budget vote speech. 

Calling it South Africa’s largest property portfolio, Macpherson said that “for decades, this portfolio has been underutilised, mismanaged, and allowed to decay.”

This has led to buildings, many in the centre of South African cities, being abandoned and left to decay or taken over by squatters. 

The management of state properties currently falls within the Department’s Property Management Trading Entity (PMTE).

This is controlled by the Government Immovable Asset Management Act, which has not been updated in almost 20 years. 

The act ensures that state property is used to optimise service delivery. While the Department of Public Works and Infrastructure is responsible for the acquisition, management and disposal of these assets, their control is restricted. 

This legally ties state-owned buildings to service delivery, preventing the use or sale of buildings for profit or financial sustainability. 

It also keeps these properties locked in long-term cycles where the condition of assets only needs to be assessed every fifth year.

The DA’s spokesperson for Public Works and Infrastructure says that the regulations lock assets into outdated and counterproductive systems that slow infrastructure and service delivery, weaken financial sustainability and prevent the assets from generating value. 

In addition, the party estimates that R6 billion a year is wasted on the government leasing private property. This amount would be returned to state coffers and invested in the state’s own portfolio.

Under the new changes, the Minister said he would dispose of thousands of non-core assets, while high-value assets will be packaged for investment and redevelopment. 

Macpherson believes the work of the new SOE will attract “massive capital investment into the country.”

“Because, if you have this huge portfolio that’s sitting dead, there are companies all over the world that will want to invest in and upgrade and develop that,” he said. 

He added that the new entity will fundamentally reshape the existence of the Department. Still, this will add to South Africa’s list of over 120 government-owned companies, most of which are unprofitable.